Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Barclays Global Financial Services Conference 2016
37 slides from Jp Morgan Chase &'s conference presentation, Sep 12, 2016
Slide 1: Gordon Smith, CEO Consumer & Community Banking, Barclays Global Financial Services Conference
Gordon Smith, Chief Executive Officer – Consumer & Community Banking September 12, 2016 Barclays Global Financial Services Conference
Slide 2: Agenda
Agenda Page State of the U.S. Consumer 1 Chase Consumer & Community Banking business fundamentals 7 Payments update 19 Summary 28 BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENCE Appendix 30 1
Slide 3: We have relationships with more U.S. households than any other financial services provider
We have relationships with more U.S. households than any other financial services provider Estimated penetration of U.S. households (mm) Chase account and transactions statistics # of checking Chase 1 ~59 accounts4 ~32mm Chase ~53mm Bank of America ~49 # of credit, debit, and 2 Bank of America ~47 p
Slide 4: Millennials are the largest generation and an increasingly influential demographic
Representing ~30% of the 18+ population today, Millennials are the largest generation and an increasingly influential demographic with $1.4T in retail spending by 2020 Population and retail spend by generation 2020 2014 – 2020 2020 Ages Population % of adult 2014 share of Generation retail spend ret
Slide 5: Millennials make up the majority of our new deposit customers
Millennials make up the majority of our new deposit customers, and we lead competitors in primary relationships with Millennials Chase checking account acquisitions by age1 57% % of total acquired accounts 18-24 25-30 31-35 36-40 41-45 46-50 51-55 56-60 61-65 66-70 71+ Millennials primary financial
Slide 6: Millennials spend more of their wallet on experiences than other generations
Millennials spend more of their “wallet” on experiences than other generations Spend category distribution by generation (credit + debit cards, 2015) Travel 6% 7% Experiences Entertainment 12% 10% 34% 28% 11% Dining 16% 6% Home improvement 3% 11% Transportation/fuel 12% 18% Grocery 15% Retail 20% 19
Slide 7: We perform strongly with Millennials, particularly within our branch footprint
We perform strongly with Millennials, particularly within our branch footprint In Chase footprint Chase customers as a percentage of total Millennial Top 10 metro areas by Millennial population (mm) population Millennials All other population Chase customers All other Millennials New York 4.7 15.2 1
Slide 8: Agenda
Agenda Page State of the U.S. Consumer 1 Chase Consumer & Community Banking business fundamentals 7 Payments update 19 Summary 28 BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENCE Appendix 30 7
Slide 9: Continued strong momentum across key business drivers
We have continued strong momentum across key business drivers, driven by consistent investment strategy Key business drivers $ in billions, except ratios and where otherwise noted 1H 2016 YoY ∆ Consumer & Households (mm) 59.2 2% Community Banking Active mobile users (mm) 24.8 18% New accounts opened
Slide 10: Growth metrics are driven by deep relationships with high-performing customers
Our growth metrics are driven by deep relationships with high-performing customers Chase engaged households1 Checking balances per new account2 Business Banking average loan size +1mm +4% +25% CHASE CONSUMER & COMMUNITY BANKING BUSINESS FUNDAMENTALS 1H15 1H16 1H15 1H16 1H15 1H16 Auto manufacturing p
Slide 11: New customers leverage lower cost channels and are more digitally engaged
Our new customers leverage lower cost channels with greater frequency and are more digitally engaged than our existing customers Includes only customers who use Chase as their primary bank (data as of 2Q16 for Chase deposit products, unless otherwise noted) % mobile active % ATM active % paperless (
Slide 12: Strong growth in deposits and core loans
We continue to see strong growth in deposits and core loans Consumer & Community Banking avg. deposits ($B) Consumer & Community Banking avg. loans1 ($B) Card Mortgage Banking 3 Auto Business Banking/Other 2 CAGR Non-core loans (all LOBs) +10% Total: +8% 2012 – 1H 2016 Core: +16% CAGR Total: CHASE C
Slide 13: Credit trends across the businesses continue to be favorable
Credit trends across the businesses continue to be favorable1 Credit Card net charge-off and 30+ delinquency rates 6.00% 5.00% 4.40% 4.00% 3.00% 2.56% 2.70% 2.00% 1.00% 1.40% 0.00% 2 3 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 CHASE CONSUMER & COMMUNIT
Slide 14: Credit quality across the businesses continues to be favorable
Credit quality across the businesses continues to be favorable Credit Card Average FICO at Origination Risk Adjusted Revenue Margin ~+100 bps 759 747 737 726 2008 2012 2013-2015 2013-2015 2012 Vintage 2 2013-2015 Vintages 3 CHASE CONSUMER & COMMUNITY BANKING BUSINESS FUNDAMENTALS Vintage Vintage Vin
Slide 15: Chase Card has modest exposure to FICO <660
Chase Card has modest exposure to FICO <660, and is lowest in the 640-720 range Chase vs. Competitors – FICO <660 portfolio mix1 Chase vs. Competitors FICO (640–720) portfolio mix2 40% CHASE CONSUMER & COMMUNITY BANKING BUSINESS FUNDAMENTALS 35% 35% 31% 30% 25% 25% 24% 39% 34% 31% 20% 28% 28% 26% 17
Slide 16: Chase Auto has managed layered risk
Chase Auto has managed layered risk <620 FICO Score1 – Chase Auto2 loan mix vs. Industry3 5% LTV > 120 1% CHASE CONSUMER & COMMUNITY BANKING BUSINESS FUNDAMENTALS Chase Industry 8% 3% LTV 101 – 120 Chase Industry 4% 3% LTV < 100 Chase Industry Note: All percentages are of total auto loans for Chase
Slide 17: Card credit trends remain strong, with modest deterioration in late stage delinquencies
Card credit trends remain strong, but with modest deterioration in late stage delinquencies Credit Card delinquency $ roll-rate from current to 60 days past due1 2.0% 1.5% 1.0% CHASE CONSUMER & COMMUNITY BANKING BUSINESS FUNDAMENTALS 0.5% 0.0% Credit Card delinquency $ roll-rate from 60 days past du
Slide 18: Exit 2016 with CCB structural expense $2.35B lower than 2014
We expect to exit 2016 with CCB structural expense $2.35B lower than 2014 CCB structural expense ($mm) $2,700 CHASE CONSUMER & COMMUNITY BANKING BUSINESS FUNDAMENTALS $350 2016 Mortgage Lower Branch Internal Paperless Various Other³ 4Q16 Exit Investor Day Banking foreclosure¹ transformation technolo
Slide 19: Investing in marketing to take advantage of market opportunities
We are investing in marketing to take advantage of attractive market opportunities Incremental Marketing Investments Select examples ROE > 20% 2014 to 1H 2016 On average ~$375mm annual investment yielded per year1: CHASE CONSUMER & COMMUNITY BANKING BUSINESS FUNDAMENTALS Credit Card ~1.45mm new
Slide 20: Agenda
Agenda Page State of the U.S. Consumer 1 Chase Consumer & Community Banking business fundamentals 7 Payments update 19 Summary 28 BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENCE Appendix 30 19
Slide 21: We deliver scale to each component of the payments ecosystem
We deliver scale to each component of the payments ecosystem Chase’s scale across merchants and consumers is Chase holds strong market share positions unmatched Position: Consumer reach #1 #1 #2 ~94mm credit, debit and pre-paid card accounts4 18mm digital and mobile logins each day 18% 16% 16% P
Slide 22: Two new proprietary products: Freedom Unlimited and Sapphire Reserve
We recently launched two new proprietary products to better meet customers’ needs JPMorgan Reserve and Chase Sapphire Reserve – Freedom Unlimited – launched 1Q16 launched 3Q16 Flat 1.5% cash back for consumers seeking Differentiates on rewards value and flexible simplicity redemption options E
Slide 23: We continue to grow our co-brand portfolio
We continue to grow our co-brand portfolio Key co-brand partnerships overview Co-brand new accounts >50% Partner for over 25 years 1H12 1H16 Co-brand sales volumes1 Partner for 20 years >50% PAYMENTS UPDATE Partner for nearly 15 years 1H12 1H16 1 Excludes certain runoff and terminated partner portfo
Slide 24: Mobile payments space is in its formative period
The mobile payments space is in its formative period; our intention is to be wherever our customers want to spend Apple Pay, Android Pay, and Samsung Pay Awareness and usage among device owners1 share of retail POS payments ($)2 Awareness Usage Apple Pay, Android Pay, and Samsung Pay <1% 52% 35% 99%
Slide 25: Chase maintains leading share in credit and debit purchase volumes
Chase maintains leading share in credit and debit purchase volumes Chase share of purchase volume (credit + debit, % of total U.S. market) Position: #1 #1 #1 #1 #1 #1 16% 16% 16% 16% 15% 15% 2010 2011 2012 2013 2014 2015 PAYMENTS UPDATE Source: Nilson, 2011 – 2016 24
Slide 26: P2P is an important emerging segment of U.S. electronic payments
P2P is an important emerging segment of U.S. electronic payments with ~$200 billion in value and anticipated double digit growth P2P is strategically important Large and growing P2P market of ~$200B1, with double digit growth in mobile P2P payment volumes2 Drives customer engagement and retentio
Slide 27: Innovating in P2P payments with real-time availability
We continue to innovate in P2P payments and have launched real-time availability Zelle value proposition Ubiquitous across large Broad financial institution participation and small banks Seamless enrollment for bank customers Minimal exposure of checking account information and banking credent
Slide 28: Enhanced, real-time QuickPay experience launched in July
Chase’s enhanced, real-time QuickPay experience launched in July Enhanced real-time QuickPay experience launched in July 2016 PAYMENTS UPDATE Select contact in Chase app Enter dollar amount and Confirm transaction include notes 27
Slide 29: Agenda
Agenda Page State of the U.S. Consumer 1 Chase Consumer & Community Banking business fundamentals 7 Payments update 19 Summary 28 BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENCE Appendix 30 28
Slide 30: Chase CCB is a strong franchise with leadership positions across its businesses
Chase Consumer & Community Banking is a strong franchise with leadership positions across its businesses Consumer relationships with almost half of U.S. households Powerful customer franchise #1 in primary bank relationships within Chase footprint1 Access to J.P. Morgan investment expertise, a
Slide 31: Agenda
Agenda Page State of the U.S. Consumer 1 Chase Consumer & Community Banking business fundamentals 7 Payments update 19 Summary 28 BARCLAYS GLOBAL FINANCIAL SERVICES CONFERENCE Appendix 30 30
Slide 32: Notes on slide 12 – Credit trends across the businesses
Notes on slide 12 – Credit trends across the businesses continue to be favorable 1. Net charge-off rates for Card Services, Auto Finance and Mortgage Banking may be adjusted for significant items, as indicated below. These adjusted charge-off rates are non-GAAP financial measures used by management
Slide 33: Notes on slide 13 – Credit quality across the businesses
Notes on slide 13 – Credit quality across the businesses continues to be favorable The information supplied by Power Information Network, a business division of J.D. Power and Associates (“PIN”) is based on data believed to be reliable but is neither all-inclusive nor guaranteed by PIN. Without limi
Slide 34: Notes on slide 25 – P2P emerging segment
Notes on slide 25 – P2P is an important emerging segment of U.S. electronic payments with ~$200 billion in value and anticipated double digit growth 1. “P2P Payments in 2015: Market Sizing and Evaluation of P2P”, Javelin Strategy & Research, 2015. Market size includes online and mobile person-to-per
Slide 35: Notes on slide 26 – Innovating in P2P payments
Notes on slide 26 – We continue to innovate in P2P payments and have launched real-time availability 1. Limits for QuickPay users: Payments from Chase and verified non-Chase accounts: maximum of $2,000 per transaction, with a maximum of $2,000 total per day, maximum of $8,000 in any seven-day period
Slide 36: Notes on slide 29 – Chase CCB strong franchise
Notes on slide 29 – Chase Consumer & Community Banking is a strong franchise with leadership positions across all its businesses 1. TNS 1Q16 Retail Banking Monitor. Based on total U.S. (~5K surveys per quarter) and Chase footprint (~2.8K surveys per quarter). TNS survey questions used to determine p
Slide 37: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and unce
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