Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2016)
196 slides from Jp Morgan Chase &'s investor day presentation, Feb 24, 2016
Slide 1: Firm Overview
February 23, 2016 F I R M O V E R V I E W Marianne Lake, Chief Financial Officer
Slide 2: Strong fundamentals and track record of adapting
F I R M O V E R V I E W Strong fundamentals and track record of adapting JPMorgan Chase overview Four leading client franchises – together delivering significant value Client focus and long-term approach – consistently investing and innovating Delivering strong capital returns – while adapting
Slide 3: 2015 results – strong financial performance on an absolute basis
F I R M O V E R V I E W 2015 results – strong financial performance on an absolute basis… JPMorgan Chase overview Revenue1 Adjusted expense2 Net income CET13 Capital return Diversification supporting revenue, despite low rates and macro volatility Net interest income of $45B and noninterest reve
Slide 4: … and on a relative basis – JPM continues to be a leader
F I R M O V E R V I E W … and on a relative basis – JPM continues to be a leader JPMorgan Chase overview $24 $23 $17 $16 $6 $6 JPM WFC C BAC GS MS 13% 15% 9% 9% 8% 10% JPM WFC C BAC GS MS FY2015 Net income ($B) FY2015 ROTCE2 13% 0% (29)% 81% JPM WFC C BAC GS MS FY2015 EPS YoY growth >100% >100% FY20
Slide 5: Sustained tangible book value growth
F I R M O V E R V I E W Sustained tangible book value growth JPMorgan Chase overview 1 Refer to note 4 on slide 40 2 2010-2014 has been revised to reflect the adoption of new accounting guidance for investments in affordable housing projects TBVPS and dividends are building blocks of value creation
Slide 6: Diversification drives stability amidst significant macro volatility
F I R M O V E R V I E W Diversification drives stability amidst significant macro volatility JPMorgan Chase overview 2015 Markets cumulative revenue ($B) 1 Standard deviation divided by average over 2011-2015 period 2 NIR presented on a reported basis 3% 3% 4% 6% 8% 11% 11% USB JPM WFC BAC MS GS C P
Slide 7: Our operating model is centered around our clients
F I R M O V E R V I E W Our operating model is centered around our clients JPMorgan Chase overview Operating model Client segmentation ~50% of U.S. households >80% of Fortune 500 companies Iconic brands Diversified businesses Stable performance Fortress principles against Deepening client leadership
Slide 8: Agenda – Key Principles and 2016 Priorities
F I R M O V E R V I E W Agenda Key Principles Four exceptional client franchises – leaders in their own right Build our businesses for the long-term – consistently innovating Focus on client experience and lifetime relationships Complete platform and diversified operating model – drives clie
Slide 9: Leading client franchises market share
F I R M O V E R V I E W 2006 2014 2015 Deposits market share1 3.6% 7.6% 7.9% # of top 50 Chase markets where we are #1 ( top 3) 11 (25) 13 (40) 12 (40) Average deposits growth rate 7.7% 7.4% 9.0% Active mobile customers growth rate N.M. 22.1% 19.5% Credit card sales market share2 16% 21% 21% Merchan
Slide 10: Proven best-in-class long-term performance
F I R M O V E R V I E W $487 $447 $268 $252 $229 $155 ($277) BLK JPM BK UBS MS CS Allianz $99 $79 $77 $66 $53 $31 $29 $22 $29 $23 $130 $108 $98 $95 $76 JPM GS C BAC MS 98 70 86 79 56 31 29 7 20 22 129 99 112 99 78 JPM BAC GS C MS Markets revenue (ex. FVA/DVA) IB fees 98 70 86 79 56 31 29 27 20 22 12
Slide 11: Proven best-in-class long-term performance (cont'd)
F I R M O V E R V I E W Chase bankcard volumes Industry bankcard volumes 84% 34%Chase Industry 2010 2014 2010 2014 15% 11% 9% 5% 3% 2% COF JPM AXP DFS C BAC 8% 20% 7% 14% 2% 13% Onl ine Mobile Online Mobile Online Mobile JPM WFC BAC Online and Mobile customers 2015 YoY growth Proven best-in-class lo
Slide 12: Technology and innovation
F I R M O V E R V I E W Technology and innovation Building exceptional client franchises 1 Scale Robust Tech Foundation Conduct business in 100+ countries $5T daily payments processed $1.5T+ of securities traded & settled daily Relationships with ~50% of U.S. households ~$1T in merchant processing v
Slide 13: Agenda – Operating with fortress principles
F I R M O V E R V I E W Agenda Key principles Strong capital and liquidity position Better, faster, simpler Our balance sheet is less complex and of higher quality Demonstrated strong risk discipline through-the-cycle Executed on significant business simplification agenda Commitment to c
Slide 14: Fortress balance sheet
F I R M O V E R V I E W 2014 2015 Fortress balance sheet Operating with fortress principles 2 We have made significant progress changing the mix of our balance sheet EOP assets ($B) Note: For footnoted information, refer to slide 45 Total deposits $1,363 $1,280 Wholesale Consumer Securities $291 Sec
Slide 15: Wholesale credit risk
F I R M O V E R V I E W Wholesale credit exposure as of 12/31/15 ($B) Oil & Gas lending exposure1 as of 12/31/15 39% 19% 13% 9% 8% 7% 5% Wholesale credit risk Operating with fortress principles $357 $366 $60 Total exposure Retained loans Lending related commitments Derivative receivables North Ameri
Slide 16: Credit – net charge-offs
F I R M O V E R V I E W NCO rates at a cyclical low ($B) Peer NCO rate comparison (avg. 2011-2015) 0.57% 0.81% 0.78% 1.15% 0.54% 0.70% 0.56% 0.84% PNC USB WFC BAC JPM mix adjusted3 1 Excludes purchased credit-impaired balances 2 Includes purchased credit-impaired balances 3 “JPM mix adjusted” is cal
Slide 17: Agenda – Maximizing long-term shareholder value
F I R M O V E R V I E W Agenda Maximizing long-term shareholder value 3 55-75% Net payout ratio ~15% ROTCE 55%+/- Overhead ratio 11%+ CET1 ratio Leading to 4 Operating with fortress principles 2 Building exceptional client franchises 1 Key principles Delivering strong capital returns – while adapt
Slide 18: We have adapted…starting 2016 from a position of strength
F I R M O V E R V I E W 1 Reflects Advanced Fully Phased-In measure 2 Refer to footnote 3 on slide 40 3 GSIB represents global systemically important banks We have adapted…starting 2016 from a position of strength Maximizing long-term shareholder value 3 2014 2015 CET11 ~140bps 10.2% 11.6% Firm SLR1
Slide 19: GSIB walk
F I R M O V E R V I E W 882 ~(50) ~(55) ~(75) ~700 +/- 2015 Investor Day Rule changes and clarifications Non-op deposit reduction Other actions 4Q15 est. score and medium term target US (Method 2) Framework Score (points) Surcharge 930-1,029 5.0% 830-929 4.5% 730-829 4.0% 630-729 3.5% 530-629 3.0% G
Slide 20: Capital management framework
F I R M O V E R V I E W Capital management framework Maximizing long-term shareholder value – capital 3 Approach to capital management CET1 minimum level is calibrated to the highest of three measures Internally-developed minimum levels of capital Regulatory-driven (CCAR) stress testing Minimu
Slide 21: Capital glidepath
F I R M O V E R V I E W 11.0% 11.6% ~12.0% ~12.25% ~12.5% ~12.5% 2015 2016 2017 2018 Longer- Term Capital glidepath Maximizing long-term shareholder value – capital 3 Standardized RWA glidepath ($B) Illustrative fully phased-in Firm CET1 trajectory³ ~$1.3T ~$0.1T YE2015 Market risk Net growth Effici
Slide 22: Benefits of operating model – capital allocation and optimization
F I R M O V E R V I E W Adv RWA Std RWA GSIB⁵ CCARLeverage TLAC Liquidity Requirement CCB CIB CB AM Firm Benefits of operating model – capital allocation and optimization Maximizing long-term shareholder value – capital 3 Sharing excess capacity among our LOBs creates value for the Firm Advanced RWA
Slide 23: Estimated External TLAC requirement
F I R M O V E R V I E W $173 $335 $355 $26 $21 $162 2015 Structured notes & other Debt with <1 yr maturity External TLAC as of YE 15 Actions to close gap to External LTD Pro-forma External TLAC Senior debt $20+/- JPMorgan Chase & Co. – estimated External TLAC requirement ($B)1 Commentary Note: Numbe
Slide 24: Resilience of JPM through multiple layers of protection
F I R M O V E R V I E W Resilience of JPM through multiple layers of protection Maximizing long-term shareholder value – loss absorbing capacity 3 Fortress principles Overview Capital and liquidity resources (4Q15) TLAC external LTD $125B¹ Preferred equity $26B CET1 $173B Total reserves² $25B Capi
Slide 25: NII – well positioned for rising rates
Rates flat + Mix Implied3 (Fed Funds 0-25bps avg. / yr.) + Mix Fed Dot2 (~25-100bps avg. / yr.) + Mix $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2015 2016 2017 2018 2019 Inc re m en ta l N II F I R M O V E R V I E W NII – well positioned for rising rates Maximizing long-term shareholder value – operating
Slide 26: Noninterest revenue walk
F I R M O V E R V I E W NIR walk1 ($B) ($0.9) ($0.7) ($0.2) 2015 Card contract renewals Mortgage Simplification Growth 2016 Proforma $52.0 ~$50 Expect 3%+/- NIR growth beyond 2016 with strong underlying drivers $0.6 $51.4 Servicing balances in MB continue to decline One-time legal benefit2 1 See n
Slide 27: Adjusted expense flat despite significant investments
$36.3 $34.4 $5.9 $17.1 $16.2 ($0.8) ($1.6) ($1.2) $5.0 $5.4 $58.4 $56.0 $56+/- $0.9 2014 CCB CIB 2015 Net efficiencies Incremental investments & growth FDIC fees 2016 F I R M O V E R V I E W Adjusted expense flat despite significant investments Maximizing long-term shareholder value – operating leve
Slide 28: Earnings simulation
~$22 ~$3.5 ~$2.5 ~$2.5 ~$1.4 ~($1.1) $6+ 2015 Net income Growth CCB/CIB efficiencies CCB incremental investments/growth & Card renegotiation Credit costs Rates & mix, incl. loan growth Pro forma net income +$1.4B $0.6B $1.6B less ($0.9)B 2 ($0.3)B $0.4B — F I R M O V E R V I E W Earnings simulation
Slide 29: Conclusion
F I R M O V E R V I E W Conclusion Four leading client franchises – together delivering significant value Client focus and long-term approach – consistently investing and innovating Delivering strong capital returns – while adapting capital and liquidity frameworks Delivering significant ope
Slide 30: Agenda
Agenda Section F I R M O V E R V I E W 29 Firmwide strategic priorities 29 Appendix – Fixed Income 31 Notes 39
Slide 31: Firmwide strategic priorities
F I R M W I D E S T R A T E G I C P R I O R I T I E S Firmwide strategic priorities Consumer & Community Banking Corporate & Investment Bank Commercial Banking Asset Management Deepen relationships with our customers, simplify and improve customer experience Execute expense reduction initiatives
Slide 32: Agenda
Agenda Page F I R M O V E R V I E W 31 Appendix – Fixed Income 31 Firmwide strategic priorities 29 Notes 39
Slide 33: Liquidity management and risk oversight
A P P E N D I X – F I X E D I N C O M E Liquidity management and risk oversight Meet contractual and contingent obligations through normal economic cycles and during stress Ensure that the Firm’s core businesses are able to operate in support of client needs Optimize funding mix and maintain s
Slide 34: Overview of funding sources
A P P E N D I X – F I X E D I N C O M E $248 $248 $263 $186 $127 $558 2015 Overview of funding sources Continue to maintain diversified funding profile while reducing non-operating deposits EOP liabilities and stockholders’ equity at 12/31/15 ($B) 3 $759 4 $1,280 3 Operating5 Non-operating $2,352 Ot
Slide 35: Deposit beta uncertainty and impact on NII
A P P E N D I X – F I X E D I N C O M E > 50% deposit beta ~50% deposit beta $10B+ $13B+ Modeled 2004 cycle reprice In c r e m e n ta l N II Deposit beta uncertainty and impact on NII 34% 10% 47% 57% 19% 33% 2007 2015 Expect deposit beta to be higher than the 2004 cycle… …however, there is uncertain
Slide 36: Total firmwide long-term debt
A P P E N D I X – F I X E D I N C O M E Total firmwide long-term debt Diversified mix and maturity profile Total long-term secured and unsecured debt issuance and maturities1 ($B) Note: Numbers may not sum due to rounding; "Hold Co." is defined as JPMorgan Chase & Co., “Bank” is defined as JPMorgan
Slide 37: Hold Co. long-term debt and preferred equity
A P P E N D I X – F I X E D I N C O M E Hold Co. long-term debt and preferred equity Managing TLAC composition and maturity profile Issuance of unsecured Hold Co. benchmark long-term debt and preferred equity ($B) Total Hold Co. unsecured long-term debt maturities – TLAC eligible instruments1 ($B) $
Slide 38: Current capital position
A P P E N D I X – F I X E D I N C O M E Current capital position Basel III Standardized Fully Phased-In capital ratios and components at 12/31/15 ($B) $248 $222 $173 $199 $230 $26 $45 $26 $17 $14 Total stockholders' equity Common stockholders' equity CET1 capital¹ Total tier 1 capital¹ Total capital
Slide 39: Material entities
A P P E N D I X – F I X E D I N C O M E Material entities1 1 Presented on this slide is a list of JPM’s 32 “material entities” for resolution planning purposes under the Dodd-Frank Act, after giving effect to the dissolution of JPMN, Inc. A material entity means “a subsidiary or foreign office that
Slide 40: Agenda
Agenda Section F I R M O V E R V I E W 39 Notes 39 Firmwide strategic priorities 29 Appendix – Fixed Income 31
Slide 41: Notes on non-GAAP financial measures
N O T E S Notes on non-GAAP financial measures 1. In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results and the results of the lines of business on a “managed” basis, which is a non-GAAP financial measure. The Firm’s definition of managed basis starts
Slide 42: Notes on slide 3
N O T E S Notes on slide 3: … on a relative basis – JPM continues to be a leader 1. See note 1 in slide 40. For GS and MS, reflects revenue on a reported basis 2. See note 4 in slide 40 3. Reflects net capital distribution for 4Q14-3Q15 4. WFC adjusted for 2 for 1 stock split in 2006 and C adjusted
Slide 43: Notes on slide 8: Leading client franchises
N O T E S Notes on slide 8: Leading client franchises 1. Source for market share: FDIC Summary of Deposits survey per SNL financial; excludes all branches with $500mm+ in deposits within two years (excluded branches are assumed to include a significant level of commercial deposits or are headquarter
Slide 44: Notes on slide 9
N O T E S Notes on slide 9: Proven best-in-class long-term performance Source: Company disclosures and SNL financial, unless otherwise noted 1. Core loans calculated as Total EOP Loans less Total EOP Noncore Loans; Total loan CAGR for USB and PNC; “Noncore” defined as “Liquidating” for WFC, “All Oth
Slide 45: Notes on slide 10
N O T E S Notes on slide 10: Proven best-in-class long-term performance (cont’d) 1. Source: J.D. Power U.S. Retail Banking Satisfaction Survey; Big Banks defined as top six U.S. banks 2. Represents GPCC spend which excludes private label and commercial card; based on earnings releases and Chase inte
Slide 46: Notes on slide 13: Fortress balance sheet
N O T E S Notes on slide 13: Fortress balance sheet 1. Includes cash and due from banks and deposits with banks 2. Includes Fed funds sold and securities purchased under resale agreements and securities borrowed 3. Includes firmwide debt, derivative and equity trading assets 4. Net of allowance for
Slide 47: Notes on slide 14: Wholesale credit risk
N O T E S Notes on slide 14: Wholesale credit risk 1. O&G lending exposure includes ~$4B of exposure in Natural Gas & Pipelines outside of wholesale industry segment definition of Oil & Gas, and excludes $2B of O&G derivative receivables; M&M lending exposure excludes ~$1B of M&M derivatives receiva
Slide 48: Notes on slide 21
N O T E S Notes on slide 21: Benefits of operating model – capital allocation and optimization 1. Private Equity, retained operational risk capital, real estate, BOLI/COLI, DTA and pension 2. 2015 reflects the Firm’s 10-K reported average excluding Corporate goodwill. 2016 reflects approximations ba
Slide 49: Notes on slide 22: TLAC
N O T E S Notes on slide 22: Composition and calibration of TLAC Note: The Firm’s estimate of minimum total loss absorbing capacity (“TLAC”) is based on the Federal Reserve’s (“Fed”) October 30, 2015 proposed rule establishing total loss-absorbing capacity, long-term debt, and clean holding company
Slide 50: Notes on slide 26
N O T E S Notes on slide 26: Adjusted expense flat despite significant investments 1. Adjusted expense defined as total expense excluding firmwide legal expense; see note 2 on slide 40 2. Adjusted overhead ratio defined as adjusted expense divided by total revenue; see note 2 on slide 40 3. Client f
Slide 51: Notes on slide 27: Earnings simulation
N O T E S Notes on slide 27: Earnings simulation Note: Numbers may not sum due to rounding for illustrative purposes. Amounts are aftertax and reflect an incremental tax rate of 38%, where applicable 1. Includes: • 2015 legal expense in excess of $2B assumed run-rate for legal expense. Amount is for
Slide 52: Notes on slide 33: Overview of funding sources
N O T E S Notes on slide 33: Overview of funding sources 1. Other includes: accounts payable and other, Federal Funds purchased and a portion of beneficial interests issued by consolidated variable interest entities (“VIEs”) that are not considered to be secured funding 2. Secured funding includes c
Slide 53: Forward-looking statements
N O T E S 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 significan
Slide 54: Consumer & Community Banking
February 23, 2016 C O N S U M E R & C O M M U N I T Y B A N K I N G Gordon Smith, Chief Executive Officer Consumer & Community Banking
Slide 55: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 1 Consumer & Community Banking 1 Payments 20 Credit Card 29 Mortgage Banking 36 Consumer Banking 43 Appendix 51
Slide 56: Consistent set of strategic priorities
C O N S U M E R & C O M M U N I T Y B A N K I N G We remain focused on a consistent set of strategic priorities Deepen relationships with our customers, simplify and improve customer experience Maintain strong control environment and automate processes Increase digital engagement by delivering
Slide 57: Performance targets
C O N S U M E R & C O M M U N I T Y B A N K I N G 1 Excludes held-for-sale loans 2 Excludes the impact of purchased credit-impaired (PCI) loans Performance targets 2014 2015 Medium term guidance (+/-) 2015 Investor Day Medium term guidance (+/-) Consumer & Community Banking (CCB) Card net charge-off
Slide 58: Continued momentum across key business drivers
C O N S U M E R & C O M M U N I T Y B A N K I N G We have continued momentum across key business drivers $ in billions, except ratios and where otherwise noted, all balances are average 2015 YoY ∆ Consumer & Community Banking Households (mm) 57.8 1% Active mobile users (mm) 22.8 20% Credit Card New
Slide 59: We continue to improve our customer experience
C O N S U M E R & C O M M U N I T Y B A N K I N G We continue to improve our customer experience J.D. Power U.S. retail banking satisfaction1,2 680 700 720 740 760 780 800 820 2010 2011 2012 2013 2014 2015 J.D. Power overall satisfaction index Chase Midsize Banks Industry Average Regional Banks Big
Slide 60: Strong growth in deposits and core loans
C O N S U M E R & C O M M U N I T Y B A N K I N G Consumer & Community Banking average loans1 ($B) We see strong growth in deposits and core loans Consumer & Community Banking average deposits ($B) $414 $453 $487 $531 2012 2013 2014 2015 Note: Numbers may not sum due to rounding 1 Includes held-for-
Slide 61: High-quality lending portfolios resilient through-the-cycle
C O N S U M E R & C O M M U N I T Y B A N K I N G We have built high-quality lending portfolios that will be resilient through-the- cycle 1 Balance transfers include cash advances. Average bank card debt / self-reported income is for new accounts booked in 2008 and 2015 2 Excludes operating leases.
Slide 62: Credit losses are at low levels
C O N S U M E R & C O M M U N I T Y B A N K I N G Credit losses are at low levels, but we rigorously monitor for signs of stress Credit Card net charge-offs Auto Finance net charge-offs 0.0% 2.0% 4.0% 6.0% $0 $500 $1,000 $1,500 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q
Slide 63: Reduced expense by ~$4B and headcount by ~43K since 2012
C O N S U M E R & C O M M U N I T Y B A N K I N G We have reduced expense by ~$4B and headcount by ~43K since 2012 $28.8 $27.8 $25.6 $24.9 2012 2013 2014 2015 CCB expense ($B) CCB headcount (K)1 178.7 160.3 148.2 136.0 2012 2013 2014 2015 ($3.9) (42.7) 1 Includes employees and contractors; 2013 head
Slide 64: Expense reduction initiatives on track
C O N S U M E R & C O M M U N I T Y B A N K I N G $25.6 $24.6 ($2.7) $1.0 $0.7 2014 Structural expenses Auto lease growth Incremental investments Exit 2016 / 2017 CCB expense ($B) Our expense reduction initiatives are on track and we are making additional investments in opportunities that will gener
Slide 65: Mortgage Banking transformation
C O N S U M E R & C O M M U N I T Y B A N K I N G Mortgage Banking transformation 1 Includes employees and contractors; 2013 headcount adjusted for ~1,250 reduction effective January 1, 2014. The prior period headcount figures have been revised to conform with the current presentation Mortgage Banki
Slide 66: Making it easier for customers to self-serve
C O N S U M E R & C O M M U N I T Y B A N K I N G 2012 2015 Transactional staff (K)3 (12) Branch transaction migration We are making it easier for customers to self-serve Enabling more ATM and mobile transactions New mobile and online functionality launched in 2015 ~90% of all teller transacti
Slide 67: Digital assets lower cost to serve
C O N S U M E R & C O M M U N I T Y B A N K I N G 4Q2012 4Q2015 All other primary relationships Digitally-centric Customer preference for our digital assets enables us to lower cost to serve Consumer Bank primary bank customers – impact of digitally-centric behavior1 % of primary bank customers who
Slide 68: Paperless adoption
C O N S U M E R & C O M M U N I T Y B A N K I N G Paperless adoption Paper statement delivery costs ~$0.50, while electronic statement delivery costs ~$0.011 To drive paperless adoption, we are focused on: Simplifying the paperless enrollment process for customers Increasing types of documen
Slide 69: Travel, vendor rationalization and real estate strategy
C O N S U M E R & C O M M U N I T Y B A N K I N G 2013 2015 Travel & Entertainment, vendor rationalization and real estate strategy Jan '13 Dec '15 Non-branch buildings Number of vendors 2013 2015 ~200 at YE2015; target achieved 1 year early Travel & Entertainment spend (33%) (20%) (127) Payments CC
Slide 70: Servicing unit costs
C O N S U M E R & C O M M U N I T Y B A N K I N G Servicing unit costs 2012 2015 1 Represents Consumer & Business Banking 2 Excludes Commercial Card, Canada and certain terminated partners/products 3 Excludes network licensing fees for ChaseNet Merchant processing cost per transaction3 (13%) 2012 20
Slide 71: Accelerating investment in marketing
C O N S U M E R & C O M M U N I T Y B A N K I N G We are accelerating our investment in marketing to take advantage of attractive market opportunities ROE > 20% Credit Card marketing Consumer Banking marketing $100mm investment generates on average… ~400K new accounts ~$3B annual spend ~$6
Slide 72: The new Chase.com
C O N S U M E R & C O M M U N I T Y B A N K I N G Significant simplification including single dashboard, consolidated profile and simpler navigation Consistent experience across digital interfaces (website, tablet, smartphone) More personalized experience for customers Chase.com enhancements C
Slide 73: Industry-leading mobile app
C O N S U M E R & C O M M U N I T Y B A N K I N G Mobile banking preferences and enhancements We continue to enhance our industry-leading mobile app1 Chase Mobile® app 1 Rated #1 mobile banking app among large banks; Javelin Research, January 2015 2 Alix Partners, July 2015. Data represents 4Q15 res
Slide 74: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 20 Payments 20 Consumer & Community Banking 1 Credit Card 29 Mortgage Banking 36 Consumer Banking 43 Appendix 51
Slide 75: World-class payments franchise
P A Y M E N T S We have made strategic decisions and investments over the past 8 years that have led to the creation of a world-class payments franchise 2008 2012 2016 M e rc h a n ts C o n s u me rs 2008: Chase dissolves JV with First Data 2009: Chase launches Ultimate RewardsSM 2016: Launch of Cha
Slide 76: Payments strategy
P A Y M E N T S Payments strategy Our payments strategy is designed to address consumer and merchant pain points and needs Integrated Merchant Experience ChaseNet closed loop system Integrated merchant loyalty Digital Payments – Consumer to Business Ensure Chase cards can be used everywhere ou
Slide 77: We bring scale to each component of the payments ecosystem
P A Y M E N T S Chase American Express Bank of America Wells Fargo We bring scale to each component of the payments ecosystem Note: For footnoted information, refer to appendix Over 90mm credit, debit and pre-paid card accounts3 16mm digital and mobile logins each day Consumer reach $754B in t
Slide 78: ChaseNet continues to expand
P A Y M E N T S ChaseNet, our proprietary network, continues to expand ChaseNet volumes 2015 2015 Dec. run-rate 2016 outlook Sample ChaseNet merchants ChaseNet’s unique value proposition Streamlined rules (e.g., removed signature requirement for transactions less than $1K) Simplified pricing str
Slide 79: Chase Pay digital payment solution
P A Y M E N T S Chase Pay, our proprietary digital payment solution, connects merchants and consumers and drives value for both Simple checkout Loyalty rewards Protects my information Consumers Lower cost of payment Enable loyalty programs Fraud liability protection Merchants Payments CC
Slide 80: MCX digital wallet pilot
P A Y M E N T S MCX’s digital wallet pilot in Columbus, Ohio is providing customer learnings related to digital wallet usage across merchant verticals MCX merchants in CurrentC pilot Payments CCB Mortgage Banking Consumer Banking Credit Card 26
Slide 81: Starbucks payments agreement
P A Y M E N T S We have signed a payments agreement with Starbucks which will drive Chase Pay adoption Chase Pay mobile app can be used at more than 7,500 company operated Starbucks locations in the U.S. Chase Pay can also be used to reload a Starbucks Card within the Starbucks mobile app and on
Slide 82: P2P solution with partner banks
P A Y M E N T S In conjunction with six partner banks, we are launching a P2P solution with real- time funds availability New bank P2P solution Secure Real-time funds availability Single consumer-facing brand Partner banks represent 60% of all U.S. consumers with mobile banking apps2 Banks h
Slide 83: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 29 Credit Card 29 Consumer & Community Banking 1 Payments 20 Mortgage Banking 36 Consumer Banking 43 Appendix 51
Slide 84: Strong credit card issuing business
C R E D I T C A R D At the foundation of our payments platform is a strong credit card issuing business Products Broad range of offerings relevant to multiple customer segments Distribution Wide branch network and strong partnerships Scale 21% of credit card sales market share1 Engaged consume
Slide 85: Card issuing business robust growth
C R E D I T C A R D Our industry-leading card issuing business continues to experience robust growth 2012 2015 Chase credit card sales volume ($B)4 $496 $247 $221 $118 American Express Chase Citi Capital One Bank of America Discover 2 2015 credit card sales volume ($B) $572 $263 Estimated impact of
Slide 86: Renewal of key co-brand partnerships
C R E D I T C A R D 2012 2015 Successful renewal of key co-brand partnerships will reduce revenue margin to 11.25%+/- in the medium term Recent renewal examples 1 Excludes certain runoff and terminated partner portfolios Co-brand acquisitions continue to grow1 Co-brand new accounts Renewed Mid- cont
Slide 87: Strong branded card business
C R E D I T C A R D We have a strong branded card business and are continuing to enhance our value propositions to remain competitive Chase-branded in-year sales by vintage Our branded products fill key positions in our overall portfolio 2012 2015 Product recently refreshed; strong engagement and
Slide 88: Diverse acquisition channels and digital engagement
C R E D I T C A R D 2012 2015 We are leveraging diverse acquisition channels and driving digital engagement with our customers 1 Excludes Canada 2 Represents applications from Chase hosted digital channels, excludes applications hosted on partner sites 24% 13% 76% 75% 12% 2012 2015 Mobile phone / ta
Slide 89: Core outstandings grown by 11% since 2012
C R E D I T C A R D We have grown core outstandings by 11% since 2012 1 Non-core loans include runoff portfolios, discontinued product(s) no longer originated, and/or business simplification efforts 2 Excludes Commercial Card and certain terminated partner portfolios Credit card EOP outstandings ($B
Slide 90: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 36 Mortgage Banking 36 Consumer & Community Banking 1 Payments 20 Credit Card 29 Consumer Banking 43 Appendix 51
Slide 91: Higher quality, less volatile mortgage business
M O R T G A G E B A N K I N G We continue to build a higher quality and less volatile mortgage business Drive efficiencies Continue to invest in technology to improve operations Investments to improve efficiency in production and servicing Reduced headcount by ~25K since 20122 Deliver a great cu
Slide 92: Housing market fundamentals continue to improve
M O R T G A G E B A N K I N G (40%) (30%) (20%) (10%) 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 1 2 3 4 Housing market fundamentals continue to improve Source: National Association of Realtors (NAR) as of 4Q15 Months of inventory 0 4 8 12 Q 4 2 0 1 0 Q 4 2 0 1 1 Q 4 2 0 1 2 Q 4 2 0 1 3
Slide 93: Repositioned Mortgage business on high-quality originations
M O R T G A G E B A N K I N G 61% 84% 9% 5% 30% 11% 2013 2015 We have repositioned our Mortgage business to focus on high-quality new originations 1 Based on dollars; Excludes Correspondent Negotiated Transactions (CNTs), Private Bank and Home Equity Chase LTV distribution of originations1 <80% 80%
Slide 94: Strong core loan growth
M O R T G A G E B A N K I N G $50 $51 $53 $57 $69 $108 $202 $174 $152 $132 $114 $96 2010 2011 2012 2013 2014 2015 $252 2010 – 2015 CAGR Non-core: (14%) Core: +17% Total: (4%) $225 $205 $189 $204 $183 We are seeing strong core loan growth Mortgage Banking average loan balances ($B) 1 Non-core loans i
Slide 95: Repositioning the servicing book
M O R T G A G E B A N K I N G We are actively repositioning the servicing book via high-quality new originations, acquired servicing and sales of low-quality units 2015 Chase servicing book activity Units 30+ delinquency rate New originations ~385K 0.01% Acquired servicing ~235K 0.27% Total “inflows
Slide 96: Reducing servicing expense
M O R T G A G E B A N K I N G We continue to reduce servicing expense Quality of servicing book continues to improve Servicing cost per loan is decreasing Continuing to invest in technology to improve operating efficiency …and will continue to trend downward Servicing expense has been declinin
Slide 97: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 43 Consumer Banking 43 Consumer & Community Banking 1 Payments 20 Credit Card 29 Mortgage Banking 36 Appendix 51
Slide 98: Consumer Banking strategic priorities
C O N S U M E R B A N K I N G Consumer Banking strategic priorities Acquire high-quality relationships and become our customers’ primary bank Improve the customer experience and deepen relationships Acquire and deepen relationships Develop new innovative capabilities to enhance our leading dig
Slide 99: Leading industry in balance growth; Chase Private Client
C O N S U M E R B A N K I N G Chase deposits grew 8.2% vs. 2.5% industry growth We lead the industry in balance growth while Chase Private ClientSM continues to deepen relationships with affluent clients Chase Private Client net new money ($B)3 $2 $13 $27 $44 $62 2011 2012 2013 2014 2015 0% 1 Aver
Slide 100: Deepening relationships with Millennials
C O N S U M E R B A N K I N G We are also deepening relationships with Millennials, who make up the majority of our new customers 1 Includes new to bank and existing customer checking account openings in 2015; excludes accounts of customers under 18 years of age 2 Primary relationship based on inter
Slide 101: Optimizing branch network size
C O N S U M E R B A N K I N G 16 (28) (189) ~(150) 2013 2014 2015 2016F Net change in branches 2013 2014 2015 Beginning branch count 5,614 5,630 5,602 New builds1 132 71 20 Consolidations1 (116) (99) (209) Net change in branches 16 (28) (189) Ending branch count 5,630 5,602 5,413 Network activity 1
Slide 102: Branch network optimization and market share growth
C O N S U M E R B A N K I N G 9% 11% 18% 16% 25% 11% 12% 20% 19% 26% Miami San Francisco Houston Chicago Phoenix 2012 deposit share 2015 deposit share We are optimizing our branch network to support evolving customer needs while growing market share faster than the industry 1 Source: FDIC 2015 Summa
Slide 103: Attractive footprint across the U.S.
C O N S U M E R B A N K I N G We have an attractive footprint with strong positioning across the U.S. 1 Source: FDIC 2015 Summary of Deposit survey per SNL Financial; excludes all branches with $500mm+ in deposits in the last two years (excluded branches are assumed to include a significant level of
Slide 104: Strong franchise with leadership positions
Chase Consumer & Community Banking is a strong franchise with leadership positions across its businesses Note: For footnoted information, refer to appendix Consumer relationships with almost half of U.S. households #1 in primary bank relationships within Chase footprint1 Powerful customer franch
Slide 105: Agenda
Agenda Page C O N S U M E R & C O M M U N I T Y B A N K I N G 51 Appendix 51 Consumer & Community Banking 1 Payments 20 Credit Card 29 Mortgage Banking 36 Consumer Banking 43
Slide 106: Notes: Credit losses
A P P E N D I X Notes on slide 8 – Credit losses are at low levels, but we rigorously monitor for signs of stress 1. Credit card net charge-off rate excludes held-for-sale loans 2. 2Q12 adjusted net charge-offs for Card Services were $1,254mm or 4.05%; excluding the effect of a change in charge-off
Slide 107: Notes: Customer preference for digital assets
A P P E N D I X Notes on slide 13 – Customer preference for our digital assets enables us to lower cost to serve 1. Primary bank digitally-centric is defined as primary bank households conducting at least three digital transactions (excluding logins, including Chase QuickDeposit, transfers, Bill Pay
Slide 108: Notes: Chase CCB strong franchise
A P P E N D I X Notes on slide 50 – Chase Consumer & Community Banking is a strong franchise with leadership positions across all its businesses 1. TNS 3Q15 Retail Banking Monitor; based on total U.S. (~5K surveys per quarter) and Chase footprint (~2.8K surveys per quarter); TNS survey questions use
Slide 109: Asset Management
February 23, 2016 A S S E T M A N A G E M E N T Mary Erdoes, Chief Executive Officer Asset Management
Slide 110: Consistent growth across a world-class franchise
A S S E T M A N A G E M E N T Consistent growth across a world-class franchise Consistency – high margin, high ROE, predictable growth Breadth – diversified earnings from multiple products, channels, and regions Depth – strong global client-centric franchises, each with significant room to gro
Slide 111: Record growth and results
A S S E T M A N A G E M E N T Leads with investment performance ■ Mutual funds with a 4/5 star rating (#)1 157 231 +74 ■ Assets under management ($T) $1.3 $1.7 6% ■ Client assets ($T) $1.8 $2.4 5% Record growth and results ■ Revenue ($B) $9.0 $12.1 6% ■ Deposits ($B) $92 $147 10% ■ Loans (ex-mortgag
Slide 112: Diversified, predictable, capital-efficient business
A S S E T M A N A G E M E N T $12.1 $12.0 $11.4 $10.0 $9.6 $9.0 Global Investment Management (GIM) Global Wealth Management (GWM) Diversified, predictable, capital-efficient business 21%23%23%24%25%26% ROE Revenue ($B) 2010 2011 2012 2013 2014 2015 Pretax income ($B) AM GIM GWM $3.2$3.5$3.3$2.8$2.5$
Slide 113: 2015 flows positive but below historical levels
A S S E T M A N A G E M E N T Source: Company filings, Strategic Insight Simfund 1 Industry represents open-end long-term registered products; excludes Fund of Funds 2 Revenue based on management fees only 2015 flows positive but below historical levels $22 $13 $36 $58 $44 $22 $80 2013 $90 2012 $58
Slide 114: Flows across diverse channels, regions, and products
A S S E T M A N A G E M E N T Fixed Income Equity Multi-Asset Alternatives Other GWM U.S. EMEA Asia LatAm ███ < $(100mm) ███ Flat ███ > $100mm GIM U.S. EMEA Asia LatAm GIM U.S. EMEA Asia LatAm Fixed Income Equity Multi-Asset Alternatives Other GWM U.S. EMEA Asia LatAm Flows across diverse channels,
Slide 115: Investment performance rankings vs peers
A S S E T M A N A G E M E N T 2011 2012 2013 2014 2015 JPM Peer 3 Peer 5 Peer 5 Peer 5 Peer 5 Peer 1 JPM Peer 1 JPM Peer 11 JPM Peer 2 Peer 1 JPM Peer 11 Peer 6 Peer 1 Peer 3 Peer 4 Peer 4 Peer 4 Peer 12 Peer 4 Peer 4 Peer 7 Peer 2 Peer 2 Peer 4 Peer 2 Peer 5 Peer 2 Peer 7 Peer 12 Peer 7 Peer 11 Pee
Slide 116: Investing in people and technology through temporary headwinds
A S S E T M A N A G E M E N T Continuing to invest in people and technology through temporary headwinds AM GIM GWM 27% 31% 2018 2015 30%+ 2010 Expenses leveling off Continued investment in growth Controls uplift Account remediation Low rates Temporary headwinds Pretax margin Flat Flat + ~250 people
Slide 117: Benefit from being part of JPMorgan Chase
A S S E T M A N A G E M E N T Invaluable benefit from being part of JPMorgan Chase AM GIM GWM Brand / Marketing Products / Distribution Real Estate Technology Community Engagement Talent #20 Fortune most admired company ~$3B marketing spend 5K+ branches ~18K ATMs 75mm square feet of proper
Slide 118: GIM: exceptional investment capabilities
A S S E T M A N A G E M E N T GIM: Built on a foundation of exceptional investment capabilities Superior client outcomes Strong investment performance: 84% of 10-year LT mutual fund AUM in top 2 quartiles1 Serve 60% of world’s largest pension funds, sovereign wealth funds, and central banks Glob
Slide 119: Leading mutual fund performance across asset classes
A S S E T M A N A G E M E N T Total8 % of 2015 MF AUM over peer median1 (net of fees) 3-year 5-year Equity Fixed Income Leading mutual fund performance across asset classes globally 10-year Multi-Asset Solutions 78% 68% 77% 78% 80% 84% For important footnoted information, please refer to notes appen
Slide 120: Systematic investment process
A S S E T M A N A G E M E N T Systematic Valuation Information Advantage Portfolio Construction 30-year proven process in US Core equities Starts with analyst DDR rankings 9 portfolio managers, 11 traders Shorting stocks since early 90’s 27 U.S. career analysts 17 years average experience
Slide 121: Alternative investment innovation
A S S E T M A N A G E M E N T Over three decades of alternative investment innovation Alternative Beta (LIBOR 1 Month EUR) U.S. Value-Add Real Estate (NFI-ODCE) Private Equity (Cambridge Global PE & VC) AM GIM GWM 2015 JPM Alternatives client assets ($B) $221 Liquid Alts Other GWM Alts (incl. 3rd-pa
Slide 122: Strong Solutions business
A S S E T M A N A G E M E N T Strong Solutions business leveraging underlying product platforms GIM GWM 2014 2015 2010 AM Industry: 13% CAGR2 JPM: 27% CAGR GIM Global Solutions AUM1 Source: Morningstar, Strategic Insight Simfund, eVestment For important footnoted information, please refer to notes a
Slide 123: Breadth, depth and quality of GIM product offering
A S S E T M A N A G E M E N T GIM’s success is driven by the breadth, depth, and quality of our product offering GIM GWM AM J.P. Morgan Peer 1 Peer 2 Peer 3 Peer 4 4 0 -A ct ( U S -d o m ici le d )2 Equity Fixed Income Solutions3 4/5-star mutual funds in largest LT active categories by AUM (top 5 ma
Slide 124: Market leading Liquidity platform
A S S E T M A N A G E M E N T Market leading Liquidity platform Global Money Market asset growth (USD and EUR) Consistent global MMF rankings Growing revenue and PTI Source: iMoneyNet Impact of rate environment 2006 Firm AUM ($B) 2015 Firm AUM ($B) 1 Fidelity $271 1 Fidelity $458 2 J.P. Morgan 246 2
Slide 125: GWM: leading with advice
A S S E T M A N A G E M E N T Global, multi-currency deposit institution: ~$150B balances Leading lender to world’s major families: ~$110B balances Holistic balance sheet approach Advice-driven wealth management based on unique integrated team model Experienced talent across functions and re
Slide 126: Market share gains and productivity increases
A S S E T M A N A G E M E N T N. America LatAm EMEA Asia Market share gains and productivity increases in changing industry landscape Source: Capgemini World Wealth Report 2015 Note: Includes competitors in peer group: BAC, CS, MS, UBS, WFC Continued global growth as competitors retrench JPM PB 10%
Slide 127: Uniquely positioned with UHNW clients
A S S E T M A N A G E M E N T Uniquely positioned with UHNW clients and continuing to innovate Source: BCG Global Wealth Report 2015, company filings Note: Includes competitors in peer group who publicly report statistic: BAC, MS, UBS JPM PB uniquely positioned among UHNW clients ~30% Peer 2 ~40% Pe
Slide 128: Innovative managed solutions
A S S E T M A N A G E M E N T Asia growth Changing interest rate environment Innovative managed solutions extend our thematic conversations with clients AM GIM GWM Thematic managed investment solutions $37$34 $28 $13 $6 $2 2015 2014 2013 2012 2011 2010 Thematic managed solutions AUM ($B) = >$500mm r
Slide 129: Growth in credit book and deposits
A S S E T M A N A G E M E N T Strong growth in credit book… …with consistently low charge-off rates 2014 29 84 2015 107 +16% CAGR 82 113 25 2013 99 11 44 69 87 15 23 2011 70 55 2010 56 2012 77 18 Year-end spot balance ($B) CAGR 22% 14% Continuing to advise clients on both sides of their balance shee
Slide 130: Combined AM and Chase Wealth Management results
A S S E T M A N A G E M E N T 2015 Revenue ($B) 2015 Pretax income ($B) Combined Asset Management and Chase Wealth Management produce strong results Pretax margin 27% 40% 23% 23% 24% 22% 38% 28% 48% 21% 37% 23% 27% 2015 Client assets ($T) AM GIM GWM 23% Source: Company filings, J.P. Morgan estimates
Slide 131: Uniquely positioned and poised for continued growth
A S S E T M A N A G E M E N T Growth targets Breadth and depth of offering Top investment performance Diverse global client base JPMC franchise We are uniquely positioned in the industry and poised for continued growth AM GIM GWM Uniquely diverse presence across asset classes and client channels a
Slide 132: Notes appendix
A S S E T M A N A G E M E N T Notes appendix Page 1 1. The “% of 10-year LT mutual fund AUM in top 2 quartiles” analysis represents the proportion of assets in mutual funds that are ranked in the top 2 quartiles of their respective peer category on a 10-year basis as of December 31, 2015. The source
Slide 133: Notes appendix
A S S E T M A N A G E M E N T Notes appendix Page 6 Source: Company filings, J.P. Morgan estimates Note: Allianz, CS, DB, and UBS figures converted at average exchange rate. 1. Long-term AUM 2. Long-term AUM, administration, brokerage, custody, and deposit 3. Long-term AUM, brokerage, and deposit 4.
Slide 134: Notes appendix
A S S E T M A N A G E M E N T Notes appendix Page 10 1. The “% of AUM over peer median” analysis represents the proportion of assets in mutual funds that are ranked above their respective peer category median on 3, 5, and 10 year basis as of December 31, 2015. The sources of these percentile ranking
Slide 135: Notes appendix
A S S E T M A N A G E M E N T Notes appendix Page 11 (Top Middle) Chart shows performance of quintiles (as determined by J.P. Morgan Investment Management U.S. Equity research universe) versus the S&P 500 Index, with quintiles rebalanced monthly. Quintile performance represents the annualized return
Slide 136: Notes appendix
A S S E T M A N A G E M E N T Notes appendix Page 13 1. Excludes Advisory 2. Data for industry CAGR available for 2010-2014 only 3. Active only; excludes Fund of Funds; AUM / flows grouped at Portfolio Level (inclusive of all share classes); excludes Global Macro Opps fund, as it is considered inter
Slide 137: Notes appendix
A S S E T M A N A G E M E N T Notes appendix Page 21 Note: Allianz, CS, DB, and UBS figures converted at average exchange rate. Balances presented at end of period exchange rate. 1. Total AUM; for Allianz reflects total AUM from third-parties 2. Total AUM, brokerage, custody, and deposit; for CS as
Slide 138: Commercial Banking
February 23, 2016 C O M M E R C I A L B A N K I N G Doug Petno, Chief Executive Officer of Commercial Banking
Slide 139: Commercial Banking – a proven business model
C O M M E R C I A L B A N K I N G Commercial Banking – a proven business model Coverage segmented and focused to best serve client needs Local delivery and decision making Deep industry expertise Seasoned team with 20+ years average experience Client and community focus Rigorous client sel
Slide 140: Agenda
Agenda Page C O M M E R C I A L B A N K I N G Franchise strength 2 2015 performance 8 Opportunities 16 2
Slide 141: Commercial & Industrial overview
F R A N C H I S E S T R E N G T H Commercial & Industrial overview Client focus through dedicated segment and industry coverage Business Banking <$20mm revenue Corporate & Investment Banking >$2B revenue Middle Market Banking & Specialized Industries $20mm-$500mm revenue Corporate Client Banking & S
Slide 142: Industry-focused to better serve clients
F R A N C H I S E S T R E N G T H Beverage Industry-focused to better serve our clients and manage risks Commercial Banking - Specialized Industries Focusing resources to grow market share in these industries Industry-tailored products and custom client solutions Specialized credit expertise
Slide 143: Commercial Real Estate overview
F R A N C H I S E S T R E N G T H Commercial Real Estate overview Commercial Term Lending (CTL) Community Development Banking (CDB) Note: CB’s Commercial Real Estate (CRE) grouping used herein is internally defined to include certain client segments (REB, CTL, CDB) and will not align with regulatory
Slide 144: JPMorgan Chase platform drives competitive advantage
F R A N C H I S E S T R E N G T H JPMorgan Chase platform drives real competitive advantage #1 rank in N.A. IB fees1 Broad-based Treasury Services and payments solutions International footprint and product offering Extensive branch network Leading Asset Management business Differentiated c
Slide 145: Business innovation is a key priority
F R A N C H I S E S T R E N G T H Business innovation is a key priority Investing in new B2C and B2B payments capabilities Streamlining cross-border payments Delivering innovative solutions for industries with specialized payments needs (e.g., healthcare and government) Transforming data int
Slide 146: Agenda
Agenda Page C O M M E R C I A L B A N K I N G 2015 performance 8 Franchise strength 2 Opportunities 16 8
Slide 147: 2015 results – executing our proven strategy
2 0 1 5 P E R F O R M A N C E 2015 results – executing our proven strategy Record 1 Deposits reflect 4Q15 average balance: includes client deposits and other third-party liabilities 2 Investment Banking revenue represents total gross revenue related to investment banking products sold to CB clients
Slide 148: Deep client relationships generate stable deposits
2 0 1 5 P E R F O R M A N C E 71% 16% 8% 5% DDA Savings International Other Deep client relationships generate stable deposits 4Q15 average deposits by client tenure3 Optimizing deposit values Reduction in non-operating deposits substantially complete Current balances possess significant future
Slide 149: Disciplined C&I growth
2 0 1 5 P E R F O R M A N C E $62 $74 $74 $78 $85 2011 2012 2013 2014 2015 Commercial & Industrial loan portfolio 1 Industry data from FRB H.8 Assets and Liabilities of Commercial Banks in the United States – Commercial and Industrial loans; includes all commercial banks, not seasonally adjusted C&I
Slide 150: Commercial Real Estate loan portfolio
2 0 1 5 P E R F O R M A N C E Commercial Real Estate loan portfolio $50 $55 $63 $71 $83 2011 2012 2013 2014 2015 1 Industry data from FRB H.8 Assets and Liabilities of Commercial Banks in the United States – Real estate loans: Commercial real estate loans; includes all commercial banks, not seasonal
Slide 151: Strong credit performance through-the-cycle
2 0 1 5 P E R F O R M A N C E 0.0% 4.5% 2008 2009 2010 2011 2012 2013 2014 2015 0.0% 3.0% 2008 2009 2010 2011 2012 2013 2014 2015 1 Peer averages include CB-equivalent segments or wholesale portfolios at BAC, CMA, FITB, KEY, PNC, USB, WFC 2 Through-the-cycle, 2008-2015 average 3 Exposures related to
Slide 152: Closely monitoring credit fundamentals across Oil & Gas
2 0 1 5 P E R F O R M A N C E Closely monitoring credit fundamentals across Oil & Gas1 14 14 1 Oil & Gas classification based on Oil & Gas NAICS code classification plus natural gas pipelines and related distribution businesses 2 Includes allowance for lending-related commitments and allowance for l
Slide 153: Discipline across Commercial Real Estate franchise
2 0 1 5 P E R F O R M A N C E Maintaining discipline across Commercial Real Estate franchise Vast majority of multifamily portfolio consists of smaller loans secured by existing, stabilized properties Diversified portfolio with average loan size ~$2mm Concentrated in densely-populated, renter-
Slide 154: Agenda
Agenda Page C O M M E R C I A L B A N K I N G Opportunities 16 Franchise strength 2 2015 performance 8 16
Slide 155: Executing proven strategy in new markets
O P P O R T U N I T I E S Executing our proven strategy in new markets Note: Top 20 ranked by total population as of 2014 1 Rank based on % of 2015 Greenwich Associates Middle Market Banking study respondents in each market who identified Chase as their most important/lead bank; ties not indicated i
Slide 156: Middle Market franchise expansion
O P P O R T U N I T I E S Patient, disciplined Middle Market franchise expansion 2010 2011 2012 2013 2014 2015 Long-term target Total expansion market revenue ($mm) $1,000 $53 $232 $297 $327 # Clients Loans EOP ($B) Deposits1 ($B) 820 1,100 1,350 1,460 1,670 1,970 19% $1.6 $4.4 $6.8 $8.2 $8.8 $10.7
Slide 157: Deepening client relationships to drive revenue
O P P O R T U N I T I E S 0% 100% Liquidity Core TS Credit Commercial card Merchant services FX/ markets International Corporate finance Investment management Trade finance Deepening client relationships through unique capabilities to drive revenue Note: Data as of FY2015 unless otherwise noted 1 Re
Slide 158: Delivering IB solutions to CB clients
O P P O R T U N I T I E S Continued success in delivering IB solutions to CB clients 1 Represents the total gross revenue related to investment banking products sold to CB clients CIB partnership has resulted in deeper client coverage Commercial Banking gross investment banking revenue1 ($B) 2008 20
Slide 159: Capture market share in commercial real estate
O P P O R T U N I T I E S Opportunity to capture high-quality market share in commercial real estate 1 Trepp LLC, Commercial Mortgage Maturities, data as of 3Q15 2 Historical market share estimates based on units at year end; Market units per CoStar Group; CB CTL units per loan data 3 Representative
Slide 160: Superior returns through the cycle
O P P O R T U N I T I E S We remain confident in our ability to produce superior returns through the cycle Despite increased capital, CB business model allows us to continue to generate superior returns Revenue CB clients with full relationship1 generate ~8x the revenue of the average credit-only cl
Slide 161: Executing our proven strategy: financial targets
O P P O R T U N I T I E S Executing our proven strategy 1 Targets for overhead ratio, net charge-off rate and return on equity refer to through-the-cycle average 2 Investment banking revenue represents gross total investment banking revenue related to investment banking products sold to CB clients 3
Slide 162: Strategic priorities focused on delivering for clients
Our strategic priorities are focused on delivering for our clients Execute disciplined growth strategy through geographic expansion, industry specialization, deeper client relationships and prudent Commercial Real Estate growth Continue to invest in our team to have the best talent across our bu
Slide 163: Corporate & Investment Bank
C O R P O R A T E & I N V E S T M E N T B A N K Daniel Pinto, Chief Executive Officer Corporate & Investment Bank February 23, 2016
Slide 164: Topics for discussion
Topics for discussion 2016 Business updates Best-in-class returns in 2015 Strong revenue growth despite headwinds Market leading positions across most products Made progress in 2015 on expense reduction target Update on 5 areas Technology and innovation Treasury Services Custody and Fun
Slide 165: No significant change to overall CIB strategy
No significant change to overall CIB strategy Leverage our scale, completeness, and global network to facilitate an integrated client coverage model, leading to best-in-class ROEs Relentlessly optimize business mix while investing in core growth opportunities Continue to adapt to evolving indu
Slide 166: Agenda
Agenda Page Financial performance 3 2016 Business Updates 9 Financial Targets 26 C O R P O R A T E & I N V E S T M E N T B A N K
Slide 167: 2015 performance influenced by external environment and headwinds
Our performance in 2015 was influenced by a challenging external environment and internal headwinds T A IL W IN D S Slowing growth globally Geopolitics China and other EMs Collapse in commodity prices Worsening market liquidity Low interest rates Increased volatility Strong M&A suppo
Slide 168: Summary update from priorities set last year
Summary update from priorities set last year Optimize business mix across multiple capital constraints Reduced GSIB score to help bring overall Firm down to 3.5% bucket – without significant client or revenue impact Continue to embed cost of multiple binding constraints in the way business is co
Slide 169: JPM CIB financials
$6.9 $8.8 $10.1 $8.6 $9.2 2011 2012 2013 2014 2015 $30.4 $33.0 $34.2 $32.7 $33.2 2011 2012 2013 2014 2015 14% 18% 17% 13% 14% 2011 2012 2013 2014 2015 Net revenues and O/H1,2 ($B) Net income1,2 ($B) ROE1,2 (%) and capital ($B) 60% 57% 61% 59% 66% O/H ratio 1.4% 0.4% 0.6% (1.1)% JPM Market JPM Market
Slide 170: Consistently gaining market share across product areas
We are consistently gaining market share across most product areas 13.5% 8.9% 28.4% 13.6% JPM Market JPM Market ¹ 2010, 2014 and preliminary 2015 revenues based on Coalition for Global IB Fees & Markets; Coalition Top 10 banks include: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse
Slide 171: Market-leading positions in most products
We continue to have market-leading positions in most products JPM 20101 2014 2015 Total leadership positions 11 16 16 BANKING2 Bond underwriting 1 1 1 Loan syndication 1 1 1 ECM 1 2 1 M&A 2 2 2 Treasury Services3 -- 2 2 MARKETS 2 Total Fixed Income 1 1 1 G10 rates 4 1 1 Credit 2 3 3 G10 foreign exch
Slide 172: ROE walk forward
ROE walk forward 2.9% 1.2% 0.2% 1.8% (0.2%) (0.2%) 2014 Actual Net growth Business simplification Credit costs / Tax Higher capital requirements 2015 Actual Legal expense 10.1% 12.2% 13% 14% CIB normalized ROE walk – FY 2014 to 2015 Legal expense + 90 bps Revenue growth - 10 bps Run-off portfolio +
Slide 173: Agenda
Agenda Page 2016 Business updates 9 Financial Performance 3 Financial Targets 26 C O R P O R A T E & I N V E S T M E N T B A N K
Slide 174: 2016 Business updates
Our businesses continue to optimize their use of resources, innovate, and embrace market structure evolution Topics covered in this section Global Investment Banking Treasury Services Custody and Fund Services Markets Technology & Innovation 2 1 2 3 4 5 2 0 1 6 B U S I N E S S U P D A T E S 9
Slide 175: Comprehensive technology strategy
We continue to invest aggressively in a comprehensive technology strategy 1. Technology & Innovation 1 Multi-year strategy to simplify architecture, build scalable platforms, and create a flexible environment for rapid prototyping and deployment of technology to drive sustained improvements in clien
Slide 176: Technology impact on businesses and operating model
This is having a significant impact on all our businesses and our operating model 1. Technology & Innovation Client experience Risk management Real-time cash management and intraday liquidity monitoring Fraud detection and cybersecurity controls on client-facing platforms Globally consolidated
Slide 177: Balanced approach to emerging technologies
We have a balanced approach to exploring and adopting emerging technologies 1. Technology & Innovation 1 Internal teams at scale Strategic investment in start-ups Strategic vendors Co- development with partners Rapid prototyping Mature T echnolo g y m a tu ri ty Development approach Start-up Residen
Slide 178: Transaction banking is a large market
Transaction banking is a large market with attractive underlying growth prospects Note: Revenue pool includes Payments/Payables, Collections/Receivables, General/Liquidity and Balances Source: Coalition, BCG Global Payments Report 2015, internal JPM analysis Drivers of industry growth and evolution
Slide 179: Treasury Services broad, difficult-to-replicate platform
Treasury Services has a broad and difficult-to-replicate platform that serves clients across the entire Firm TS cross-border revenue Non-operating deposits 13% 2015 2012 -75% 2014 2015 Non-interest expenses 2015 2013 2012 2014 Business model C li e n t fr a n c h is e G lo b a l scal e P ro d u c t
Slide 180: Investing across Corporate and Financial Institution franchises
We are investing across our Corporate and Financial Institution franchises to capture the growing global wallet Starting point Strong relationships across JPM to leverage for growth Holistic client coverage Global footprint Largely complete product suite Best-in-class control environment (
Slide 181: Technology as a driver of competitive differentiation
Technology will be a transformational driver of competitive differentiation as the industry and our clients’ needs change Current state Stable platform with high volume processing capacity and market-leading straight-through rates Market-leading controls for sanctions screening, fraud checks, an
Slide 182: Custody & Fund Services market position
Our Custody & Fund Services business has a strong market position in a large, concentrated and growing industry Source: Coalition, PWC’s Asset Management: A Brave New World 2020, internal JPM analysis Global CFS revenue pool ($B) $54 $38 +6% CAGR 2020E 2014 Top 10 banks 70% Others 30% $2.6 $4.3 $6.1
Slide 183: Custody & Fund Services critical to CIB franchise
Custody & Fund Services is a critical component of the CIB franchise Strategic importance to the CIB G lo b a l scal e Core business with $3.5B in revenue Servicing the largest and most strategic clients of the CIB R es il ie n t ec o n o m ic s Significant recurring, fee based revenue Provider of ~
Slide 184: Investing to meet evolving client needs
We are investing to meet the evolving needs of our clients and drive future growth Starting point Only custodian to: Service all investor client segments AND Provide the full range of Markets and Banking capabilities High asset safety for clients from: Proprietary sub-custody network cover
Slide 185: Investment Banking investments in areas of opportunity
In our Investment Banking business, we are making investments in areas of opportunity while delivering the Firm for our clients 4. Global Investment Banking 4 Investment focus areas Completed majority of senior banker hires in targeted key areas to improve strategic dialogue at the CEO and Board l
Slide 186: Leadership in Fixed Income under multiple constraints
We maintain our leadership in Fixed Income and continue to optimize our business under multiple constraints 5 5. Markets – Fixed Income Investment focus areas Strengthen our #1 position by closing the few regional and product gaps Maintain size and focus to meet current as well as future client
Slide 187: High and resilient ROE for FICC franchise
Scale, diversification, and leading positions drive high and resilient ROE for our FICC franchise Return on equity of Fixed Income M a c ro S pre a d R u n - of f Fully loaded ROE Marginal contribution1 Rates Trading Fixed Income Overall Currencies & Emerging Markets 15% Commodities Cost of Capital
Slide 188: Adapting to changing market structure
We strive to adapt to the changing market structure and serve clients in any way that they want C li e n ts Client self- directed Worked order ELPs7 Execution venues SEFs5 ECNs6 Exchanges Channels Voice Electronic APIs¹ SDP² MDPs³ DMA4 Sales & Trading Principal Liquidity / inventory Capita
Slide 189: Fixed Income electronic trading successes in 2015
Fixed Income client trading volume by trading model Tangible successes in 2015 FX Electronic average daily volume up 40% YoY, FX Spot on JPMM up 86% YoY Algorithmic execution tools for FX on JPMM¹ JPMM¹ Mobile execution launched for FX Spot Rates Electronic client revenues up 47% YoY Inter
Slide 190: Improved Equities rank and market share
Improved Equities rank and market share while undergoing significant transformation in the business, globally and across products 5. Markets – Equities 5 Investment focus areas Significant market share growth in e-trading leveraging our top tier platform – more to do here Progress and focus in g
Slide 191: Agenda
Agenda Page Financial targets 26 2016 Business updates 9 Financial performance 3 C O R P O R A T E & I N V E S T M E N T B A N K
Slide 192: Capital optimization reduced GSIB surcharge to 3.5%
Capital optimization allowed us to reduce our estimated GSIB surcharge to 3.5%; we identified additional opportunities to maximize returns by redeployment of resources 4.5% 4.0% 3.5% JPM Method 2 GSIB score based on preliminary estimates Return-maximizing redeployment of resources in the CIB over ti
Slide 193: Additional GSIB reductions will be challenging
Additional reductions in GSIB bucket will be challenging; actions will be guided by impact on strategy, clients, and bottom line Further GSIB reduction becomes dilutive and other constraints become more binding GSIB is one of several constraints and we manage various other constraints at the CIB a
Slide 194: Pursuing cost opportunities to reduce expense by $2.8B
We continue to aggressively pursue identified cost opportunities to achieve our target reduction of $2.8B $23.3 $21.4 $1.5 $1.3 $0.3 $1.2 ~$1.2 2014 Actual Business simplification Other expense initiatives 2015 Actual Remaining expense reduction 2017 CIB expense trend – 2014 to 2017 ($B) ~$19 Legal
Slide 195: ROE walk forward to target
ROE walk forward 1.8% 0.3% 0.5% 0.9% 0.0% (0.6)% ~(1.7%) 2015 Actual Revenue Rates Business simplification Expense initiatives Other Higher capital requirement Target CIB normalized ROE walk – FY 2015 to target + 70 bps Core revenue - 40 bps Run-off portfolio - 30 bps Revenue + 30 bps Expense Revenu
Slide 196: Concluding thoughts
Concluding thoughts Strong results – on all fronts – against targets over multiple years Market leaders in product areas that are important to our clients Embracing change and leveraging technology across all lines of business Leading transactional businesses with significant growth potentia