Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Q3 2009 Earnings Presentation
21 slides from Jp Morgan Chase &'s earnings presentation, Oct 14, 2009
Slide 1: Financial Results 3Q09
FINANCIAL RESULTS 3Q09 October 14, 2009
Slide 2: 3Q09 Financial highlights
3Q09 Financial highlights Net income of $3.6B; EPS of $0.82; firmwide revenue of $28.8B1 Reported strong earnings in the Investment Bank; maintained #1 year-to-date rankings for Global Debt, Equity and Equity-related, and Global Investment Banking Fees Solid performance in Asset Management, Co
Slide 3: 3Q09 Managed results
3Q09 Managed results1 $ $ in in millions millions $ O/(U) 3Q09 2Q09 3Q08 Results excl. Merger-related items2 Revenue (FTE)1 $28,886 $1,095 $12,801 Credit Costs1 9,809 114 5,125 Expense 13,320 (26) 2,340 Merger-related items2 (after-tax) (70) 88 665 Reported Net Income $3,588 $867 $3,061 Net Income A
Slide 4: Investment Bank
Investment Bank $ Net income of $1.9B on revenue of $7.5B $ in in millions millions Immaterial net impact on profits from the combination of: $ O/(U) – Tightening of JPM and counterparty credit spreads5; and – Gains on legacy leveraged lending and mortgage-related 3Q09 2Q09 3Q08 positions Revenu
Slide 5: Retail Financial Services—drivers
Retail Financial Services—drivers Retail Retail Banking Banking ($ ($ in in billions) billions) Average deposits of $339.6B up 62% YoY and down 2% QoQ: 3Q09 2Q09 3Q08 QoQ decline partially due to the maturation of high rate Key Statistics WaMu CDs during the quarter Average Deposits $339.6 $348.
Slide 6: Retail Financial Services
Retail Financial Services $ $ in in millions millions Retail Financial Services net income of $7mm down $57mm from 3Q08 and $8mm from 2Q09 $ O/(U) Retail Banking net income of $1.0B up 44% YoY: 3Q09 2Q09 3Q08 Total revenue of $4.6B increased 61% YoY reflecting Retail Financial Services the imp
Slide 7: Home Lending update
Home Lending update Key 1 Key statistics statistics1 Overall Overall commentary commentary 3Q09 2Q09 3Q08 Some initial signs of stability in consumer delinquency EOP owned portfolio ($B) trends, but we are not certain if this trend will continue Home Equity $104.8 $108.2 $116.8 2 Prime and subpr
Slide 8: Card Services (Managed)
Card Services (Managed) $ Net loss of $700mm down $992mm YoY; decline in $ in in millions millions results driven by higher credit costs partially offset by an $ O/(U) increase in revenue 3Q09 2Q09 3Q08 Credit costs of $5.0B are due to higher net charge-offs Revenue $5,159 $291 $1,272 and an inc
Slide 9: Commercial Banking
Commercial Banking $ Net income of $341mm up 9% YoY $ in in millions millions $ O/(U) Excluding the WaMu portfolio, average loan balances were down 16% YoY, while average liability balances 3Q09 2Q09 3Q08 were up 9% YoY: Revenue $1,459 $6 $334 Average loan balances were down 5% QoQ due to Midd
Slide 10: Treasury & Securities Services
Treasury & Securities Services $ Net income of $302mm down 26% YoY and 20% QoQ $ in in millions millions Pretax margin of 26% $ O/(U) Liability balances down 11% YoY and 1% QoQ 3Q09 2Q09 3Q08 Assets under custody up 3% YoY and 8% QoQ Revenue $1,788 ($112) ($165) Treasury Services 919 (15) (2
Slide 11: Asset Management
Asset Management $ Net income of $430mm up 23% YoY $ in in millions millions Pretax margin of 33% $ O/(U) Revenue of $2.1B up 6% YoY 3Q09 2Q09 3Q08 Revenue $2,085 $103 $124 Assets under management of $1.3T up 9% YoY due to net Private Bank 639 (1) 8 inflows, partially offset by the effect of
Slide 12: Corporate/Private Equity
Corporate/Private Equity Net Net Income Income ($ ($ in in millions) millions) Private Equity $ O/(U) Private Equity gains of $155mm in 3Q09 3Q09 2Q09 3Q08 Private Equity portfolio of $6.8B (6.0% of shareholders’ equity less goodwill) Private Equity $88 $115 $252 Corporate Corporate 1,269 276 2,
Slide 13: Capital Management
Capital Management $ $ in in billions billions 3Q09 2Q09 3Q08 Tier 1 Capital1 $127 $122 $112 Tier 1 Common Capital1,2 $101 $97 $86 Risk-Weighted Assets1 $1,241 $1,260 $1,261 Total Assets $2,041 $2,027 $2,251 Tier 1 Capital Ratio1 10.2% 9.7% 8.9% Tier 1 Common Ratio1,2 8.2% 7.7% 6.8% Firmwide total
Slide 14: Outlook
Outlook Investment Investment Bank Bank Treasury & & Securities Securities Services Services Treasury Expect Fixed Income and Equity Markets revenue to Performance will be affected by market levels and liability normalize over time as conditions stabilize balance flows Retail Retail Financial Fi
Slide 15: Key investor topics
Key investor topics Capital planning: Capital ratios are high Well-positioned for changes in regulatory capital and liquidity requirements Update on consumer initiatives: Mortgage modifications efforts Non-sufficient funds/Overdraft fees New credit card products FINANCIAL RESULTS 14
Slide 16: Agenda
Agenda Page Appendix 15 FINANCIAL RESULTS 15
Slide 17: IB League tables
IB League tables League League table table results results Ranked #1 in Global Fees for YTD Sept 1 2009, with 10% market share per Dealogic YTD Sept 09 2008 Rank Share Rank Share Ranked #1 for YTD Sept 2009 per Thomson Based on fees (per Dealogic): Reuters in: Global IB fees #1 10.0% 2# 8.6% G
Slide 18: Consumer credit—delinquency trends
Consumer credit—delinquency trends Excluding credit-impaired loans Home Equity Home Equity delinquency delinquency trend trend Prime Prime Mortgage Mortgage delinquency delinquency trend trend 3.50% 30+ day delinquencies 30-89 day delinquencies 13% 30+ day delinquencies 30-89 delinquencies 11% 2.75%
Slide 19: Substantially increased loan loss reserves, maintaining strong coverage ratios
Substantially increased loan loss reserves, maintaining strong coverage ratios $ $ in in millions millions Loan Loss Reserve/Total Loans1 Loan Loss Reserve Loan Loss Reserve/NPLs1 54000 5.75% 5% 500% Nonperforming Loans 45000 4.60% 4% 400% 30,633 36000 27,381 29,072 3% 3.45% 300% 27000 2.30% 2% 200%
Slide 20: Reconciliation of GAAP to Non-GAAP Results
Reconciliation of GAAP to Non-GAAP Results $ $ in in millions millions 3Q09 2Q09 3Q08 Revenue Reported Revenue $26,622 $25,623 $14,737 Impact of Card Securitizations 1,698 1,664 873 Tax Equivalent Adjustments 460 422 478 Managed Revenue $28,780 $27,709 $16,088 Merger-related Items 106 82 (3) Adjuste
Slide 21: Notes on non-GAAP financial measures and forward-looking statements
Notes on non-GAAP financial measures and forward-looking statements This presentation includes non-GAAP financial measures. 1.Financial results are presented on a managed basis, as such basis is described in the firm’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009 and June 30,