Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q3 2005 Earnings Presentation
18 slides from Jp Morgan Chase &'s earnings presentation, Oct 19, 2005
Slide 1: Financial Results Third Quarter 2005
FINANCIAL RESULTS O C T O B E R 1 9, 2 0 0 5 Third Quarter 2005
Slide 2: Third Quarter 2005 Earnings
Third Quarter 2005 Earnings Operating earnings per share of $0.75 Special provision of $400mm taken for credit losses related to Hurricane Katrina Credit Card and Texas systems conversions successfully completed $1.1bn of Investment Bank earnings on record revenues Strong Card Services earnings grow
Slide 3: 3Q05 Earnings Comparison Non-Operating Charges (After-Tax)
3Q05 Earnings Comparison Non-Operating Charges (After-Tax)
Slide 4: 3Q05 Operating Performance Comparison
3Q05 Operating Performance Comparison 1 Operating basis excludes merger costs, non-operating litigation charges, card decertification and accounting policy conformity adjustments incurred in 3Q05, 2Q05 and 3Q04 and presents revenues and credit costs without the effect of credit card securitizations.
Slide 5: 3Q05 Adjusted Revenue
3Q05 Adjusted Revenue 1 Includes loss of revenue on portfolio sales of Manufactured Housing in 4Q04, RV in 1Q05, and mark-to-market on $1.5bn of auto loans transferred to held-for-sale in 3Q05. 2 Includes Treasury securities gains and losses and net interest income impact from portfolio repositionin
Slide 6: LOB Operating Earnings Comparison
LOB Operating Earnings Comparison 1 Retail Financial Services earnings decline excluding Katrina-related provision is (17%) QoQ and (1%) YoY 2 Card Services earnings growth excluding Katrina-related provision is 11% QoQ and 43% YoY 3 Commercial Banking earnings growth excluding Katrina-related provi
Slide 7: Impact of Hurricane Katrina
Impact of Hurricane Katrina Special provision based on current estimates for credit losses Extensive work done to estimate losses, factors considered include: Areas affected Level / type of insurance (flood & business interruption) Collateral & lien position Direct communication with customers Finan
Slide 8: Investment Bank
Earnings of $1.1bn on record revenues Continued strength in IB fees Ranked #2 in IB fees year-to-date3 Record trading with particular strength in client-related and proprietary revenues Record fixed income markets with strength across the board particularly in energy, an area of significant investme
Slide 9: Retail Financial Services - Business Drivers
Retail Financial Services - Business Drivers Continued momentum in growth initiatives YoY Checking accounts up 8% Branch sales of credit cards up 55% Branch sales of mortgage loans up 154% Mortgage loan originations up 15% Environmental/competitive challenges Deposits flat QoQ Home equity originatio
Slide 10: Retail Financial Services
Retail Financial Services Consumer & Small Business Some margin compression as expected Home Finance Positive performance in prime mortgage Auto Finance Continued competitive environment Underlying credit quality remains strong across all businesses 1 Actual numbers for all periods, not over/under 2
Slide 11: Card Services (Managed)
Card Services (Managed) 1Actual numbers for all periods, not over/under Earnings up 29% YoY - earnings up 43% excluding Katrina-related provision ROO of 2.48%, up 43bps YoY and down 8bps QoQ ; ROO of 2.77% excluding Katrina-related provision Revenues increased 6% YoY driven by higher charge volume a
Slide 12: Commercial Banking
Commercial Banking 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities Earnings up 40% YoY - earnings up 50% excluding Katrina-related provision Revenues up 9% YoY reflecting strength across all reported businesses Growth in liabili
Slide 13: Treasury & Securities Services
Treasury & Securities Services 1 Actual numbers for all periods, not over/under 2 Includes deposits and deposits swept to on-balance sheet liabilities 3 Includes an estimated $400 billion of assets under custody from ITS as of 3/31/2005 and an additional estimated $130 billion as of 9/30/2005 Earnin
Slide 14: Asset & Wealth Management
Asset & Wealth Management 1 Actual numbers for all periods, not over/under Record earnings of $315mm, up 60% YoY and 11% QoQ due to net asset inflows and market appreciation, partially offset by higher compensation expense Net asset inflows driven by liquidity and equity products, retail flows from
Slide 15: Corporate
Corporate Private Equity Gains of $313mm Portfolio of $5.9bn at end of 3Q Treasury Improvement in NII Securities losses compared with gains in prior quarters Other Corporate Prior year includes one-time gain Prior quarter includes one-time benefit of vendor negotiations 1 Actual numbers for all peri
Slide 16: Merger Milestones
Merger Milestones Tri-state market integration (2006/2007) Teller & item processing rollout Retail deposit conversion Wholesale deposit conversion Internet (2006) Migration of retail customers from BankOne.com to Chase.com Migration of heritage BankOne private label card customers to Cardmember serv
Slide 17: Outlook
Outlook Investment Bank Pipeline continues to be strong Expect more normal trading results Retail Financial Services Modest margin compression expected to continue Credit trending to normal with seasonal uptick in 4Q Card Services Modest net interest margin compression expected to continue Spike in
Slide 18: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase's management and are subject to significant risks and uncertainties. Actu