Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q2 2020 Earnings Presentation
20 slides from Jp Morgan Chase &'s earnings presentation, Jul 13, 2020
Slide 1: 2Q20 Financial Results
2Q20 Financial Results July 14, 2020
Slide 2: 2Q20 Financial highlights
2Q20 Financial highlights ROTCE1 CET1 capital ratios2 Net payout LTM 3 9% Std. 12.4%; Adv. 13.1% 129% 2Q20 net income of $4.7B and EPS of $1.38 Managed revenue of $33.8B 4,5 Expense of $16.9B 5 and managed overhead ratio of 50%4 Balance sheet Loans6: average loans of $998B up 4% YoY and up
Slide 3: Year-to-date activity
Year-to-date activity IG and HY issuance volume ($B)1 Equity issuance volume ($B)4 IG Bonds HY Bonds Follow-ons Convertibles IPOs 2 250 MoM revolver draw s $55 ($2) ($15) ($22) 50 2Q20: Convertibles: best quarter ever 2Q20: Follow-ons: best quarter since 2Q09 200 40 $675B+ issuance 3x average3 quart
Slide 4: Consumer Lending relief programs – what we are seeing
Consumer Lending relief programs – what we are seeing1 Since March 13th, we’ve provided assistance to nearly 1.7mm accounts, representing $79B2 of balances A large share of customers continue to pay us through the relief period Of the accounts w/ payment deferral Trailing seven day average of da
Slide 5: 2Q20 Financial results
2Q20 Financial results1 $B, except per share data $ O/(U) 2Q20 1Q20 2Q19 Net interest income $14.0 ($0.6) ($0.6) Noninterest revenue2 19.9 5.4 4.9 Managed revenue1,2 $B 2Q20 1Q20 2Q19 33.8 4.8 4.3 Net charge-offs $1.6 $1.5 $1.4 Expense2 Reserve build/(release) 8.9 6.8 (0.3) 16.9 0.2 0.7 Credit costs
Slide 6: 2Q20 Reserve build
2Q20 Reserve build Allowance for credit losses ($B)1 CECL adoption 1Q20 2Q20 12/31/2019 impact Reserve build 3/31/2020 Reserve build 6/30/2020 Consumer Card $5.7 $5.5 $3.8 $15.0 $2.9 $17.8 Home Lending 1.9 0.1 0.3 2.3 0.9 3.2 Other Consumer 2 0.7 0.3 0.3 1.3 0.6 1.9 Total Consumer 8.3 5.9 4.4 18.6 4
Slide 7: Fortress balance sheet and capital
Fortress balance sheet and capital $B, except per share data Capital Indicative SCB of 3.3% will be integrated into the Firm’s ongoing risk-based capital 2Q20 1Q20 2Q19 requirements effective October 1 st Risk-based capital metrics1 Basel III regulatory minimum CET1 ratios CET1 capital $191 $184
Slide 8: Pre-provision net revenue continuously generates new capital capacity
Pre-provision net revenue1 (“PPNR”) continuously generates new capital capacity Since the beginning of 2018: Average PPNR of >$13B has generated >60bps of new CET1 capacity per quarter Grew loans by $48B and total credit exposure by $196B Paid $26B of dividends and repurchased $48B 2 of shar
Slide 9: Capital remains strong even under an extreme adverse scenario
Capital remains strong even under an extreme adverse scenario Illustrative Standardized CET1 ($B) $191 Excess $1783 Entering 3Q with a fortress balance sheet Stress – $191B of CET1 and $34B of reserves Capital Buffer1 $523 We estimate our Extreme Adverse 3.3% = $51 scenario has a higher peak une
Slide 10: Opportunities for recalibration in the capital framework
Opportunities for recalibration in the capital framework Standardized CET1 ($B) $191 FRB CCAR outcomes are not predictive nor a forecast Excess 9Q cumulative loss of ~$25B based on 2020 CCAR Stress Recent COVID-19 crisis experience is materially better – even with Capital Buffer1 significant res
Slide 11: Consumer & Community Banking
Consumer & Community Banking 1 $mm Financial performance $ O/(U) Net loss of $176mm 2Q20 1Q20 2Q19 Revenue of $12.2B, down 9% YoY 2 Revenue $12,217 ($895) ($1,267) Expense of $6.6B, down 3% YoY, driven by lower travel-related Consumer & Business Banking 5,107 (984) (1,790) benefits, structural
Slide 12: Corporate & Investment Bank
Corporate & Investment Bank1 $mm Financial performance $ O/(U) Net income of $5.5B, up 85% YoY; revenue of $16.4B, up 66% 2Q20 1Q20 2Q19 Banking revenue Revenue $16,352 $6,404 $6,521 IB revenue of $3.4B, up 91% YoY Investment Banking revenue 3,401 2,515 1,625 Wholesale Payments 1,356 (3) (46)
Slide 13: Commercial Banking
Commercial Banking 1 $mm Financial performance $ O/(U) Net loss of $691mm 2Q20 1Q20 2Q19 Revenue of $2.4B, up 5% YoY Revenue $2,392 $214 $107 Middle Market Banking 866 (80) (95) Net interest income of $1.6B, down 5% YoY, driven by lower Corporate Client Banking 859 178 115 deposit margin, larg
Slide 14: Asset & Wealth Management
Asset & Wealth Management1 $mm Financial performance $ O/(U) Net income of $658mm, down 8% YoY 2Q20 1Q20 2Q19 Revenue of $3.6B, up 1% YoY Revenue $3,610 $4 $51 Asset Management 1,780 40 (5) Higher deposit and loan balances along with higher brokerage Wealth Management 1,830 (36) 56 activity we
Slide 15: Corporate
Corporate1 $mm Financial performance $ O/(U) Revenue 2Q20 1Q20 2Q19 Net revenue was a loss of $754mm, down $1.1B YoY, driven by Revenue ($754) ($920) ($1,076) lower net interest income on lower rates Expense 147 1 (85) Credit costs 4 (4) 6 Expense Net income/(loss) ($568) ($443) ($1,396) Expense
Slide 16: Outlook
Outlook1 Firmwide Expect FY2020 net interest income to be ~$56B, market dependent Expect FY2020 adjusted expense of ~$65B 1 See notes 1 and 3 on slide 16 15
Slide 17: Notes
Notes Notes on non-GAAP financial measures 1. In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the resu
Slide 18: Notes
Notes Notes on slide 2 – Year-to-date activity 1. Includes total proceeds from investment- and noninvestment-grade bonds, medium-term notes and preferred issuances in w hich JPMorgan Chase acted as a book-runner per Dealogic as of July 1, 2020 2. Month-over-month revolver draw s represents changes i
Slide 19: Notes
Notes Additional notes on slide 11 – Corporate & Investment Bank 3. Actual numbers for all periods, not over/(under) 4. Client deposits and other third-party liabilities pertain to the Wholesale Payments and Securities Services businesses 5. Represents total merchant processing volume across CIB, CC
Slide 20: 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 & Co.’s management and are subject to significant risks an