Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2019)
195 slides from Jp Morgan Chase &'s investor day presentation, Feb 26, 2019
Slide 1: Firm Overview
FIRM OVERVIEW February 26, 2019 D FIRM OVERVIEW CORPORATE & INVESTMENT BANK CONSUMER & COMMUNITY BANKING ASSET & ALTH MANAGEMENT COMMERCIAL BANKING JPMoRGAN CHASE & Co,
Slide 2: Exceptional client franchises and proven operating model
Exceptional client franchises and proven operating model – positioned to outperform in any environment Complete Global Diversified At scale Customer centric and easy to do business with Relevant to our customers Exceptional client franchises Focus on safety and security Powerful brands Cap
Slide 3: Strong financial performance in 2018 on an absolute basis
Strong financial performance in 2018 on an absolute basis… $111.5B $32.5B $9.00 revenue1 net income EPS 12.0% $28.5B 17% CET1 ratio2 net capital distribution3 ROTCE4 Record revenue and income Note: For footnoted information, refer to slide 30 2
Slide 4: …as well as relative to our peers
…as well as relative to our peers Revenue – managed ($B)1,2 Overhead ratio – managed1,3 ROTCE4 $112 72% 17% 64% 64% 16% $92 $87 57% 57% 58% 14% 14% 14% $73 11% $40 $37 JPM BAC WFC C MS GS JPM C BAC GS WFC MS JPM BAC GS WFC MS C Capital distribution ($B)5 EPS: 10-year CAGR6 TBVPS4,6: 10-year CAGR 16%
Slide 5: We have exceptional client franchises
We have exceptional client franchises… Consumer & Corporate & Commercial Asset & Community Banking Investment Bank Banking Wealth Management Serve 62mm U.S. households, Business with >80% of Fortune 500 133 locations across the U.S., incl. Serve clients across the entire including 4mm small
Slide 6: Gaining market share in nearly all of our businesses
…and we are gaining market share in nearly all of our businesses Corporate & Investment Bank Commercial Banking Global IB fees1 Markets revenue2 FICC revenue2 Equities revenue2 Treasury Services2 Securities Services2 2018 YoY loan growth3 0.6% 0.9% 0.8% 1.3% 0.4% 0.3% 1,000+ new client relationships
Slide 7: Proven best-in-class long-term performance
Proven best-in-class long-term performance EOP core loans1 Deposits2 Markets revenue & IB fees ($B) Total net client asset flows ($B) 3 5-year CAGR 5-year CAGR Total EOP Retail Cumulative 5 years Markets revenue IB fees Cumulative 5 years 9.3% 9.8% $129 $1,037 7.6% $105 $99 $95 5.7% $87 5.8% 4.8% 4.
Slide 8: Macroeconomic backdrop
Macroeconomic backdrop Fed Funds rate1 Deposit repricing2 Fed Funds effective rate 4.0 Market expectations 3.5 8% Median FOMC year-end estimates 4% 3.0 JPM Research year-end estimates 6% 2.5 Reprice 2004 cycle: 3% 2.0 meaningfully ~50% deposit reprice beta accelerated 4% ~85 bps 1.5 Current cycle: R
Slide 9: Evolution of the balance sheet
Evolution of the balance sheet RWA ($B) Avg. loans 2018 ($B) Growth YoY $1,650 ’14-’18 CAGR 2018 4Q18 Core loans Standardized 1 $1,600 $945 (ex-CIB)2: 11% 7% 6% $1,550 419 CCB: 41913% 6% $1,500 $1,450 139 AWM: 9% 12% $1,400 Advanced 205 CB: 10% 4% $1,350 121 CIB: 5% 7% 3 $1,300 60 2014 2015 2016 201
Slide 10: Evolution of the balance sheet (cont'd)
Evolution of the balance sheet (cont’d) Avg. deposits 2018 ($B) Growth Avg. loans 2018 ($B) Growth ’14-’18 YoY ’14-’18 YoY CAGR 2018 4Q18 CAGR 2018 4Q18 $1,4561 Total deposits: 4% 3% 2% Core loans 3 11% 7% 6% Ex. non-op.2: 8% 4% 3% $945 (ex-CIB)4: 670 CCB: 8% 5% 419 CCB: 41913% 6% 137 AWM: (2)% (8)%
Slide 11: Balance sheet optimization strategy
Balance sheet optimization strategy Navigating the current environment Illustrative economics of a marginal asset Marginal decisions about balance Asset RWA ROE sheet growth take into consideration: Adv. RWA Stdz. RWA Stdz. RWA Current avg. Current avg. Wholesale Capital – incremental growth wil
Slide 12: Evolution of regulatory framework
Evolution of regulatory framework Where we’ve been… Foundational principles The next chapter is close … 2010s Global consistency and 2020s Building a robust framework of resiliency harmonization Finalized implementation Dodd-Frank SCAP1 CCAR2 Stress U.S. Collins Floor Capital GSIB4 Coherence and B
Slide 13: CET1 requirement and capital distribution
CET1 requirement and capital distribution Evolving CET1 requirement Coherent regulatory capital minimums ~13%1 Appropriate calibration of SCB and GSIB 11-12%1 Dividends 11% ~11%1 Counter- Avoid duplication – in particular, counter- Mgmt. buffer cyclicality Capital Stress cyclicality Stress Conse
Slide 14: Capital allocation methodology and LOB ROE
Capital allocation methodology and LOB ROE Core philosophy: Maximize long-term shareholder value 2019 capital allocation and ROE Avg. retained equity Medium-term Ensure the Firm makes maximum use of scarce resources ($B)1 ROE – while complying with all requirements 2018 2019 Previous Revised Con
Slide 15: Net interest income – significant growth
Net interest income – significant growth Net interest income ($B) CIB Markets $6 $58+ $11 $(4) $45 Incremental NII: +$17B 2015-2019 = $13B+ 2018-2019 = ~$2.5B 5 2015 Rates / reprice Balance sheet CIB Markets / other 2019 1 growth / mix Forward looking NII drivers Rates net of deposit reprice lags Ba
Slide 16: Net interest income – steady state
Net interest income – steady state Net interest income ($B) Illustrative path Case for higher: Lower deposit betas $58-60 Case for lower: $58+ Slower deposit growth Balance sheet Higher Timing of growth and mix long-end rates deposit reprice up to $2B p.a. 2019 1 Steady state Expect steady state NII
Slide 17: Noninterest revenue
Noninterest revenue1 Noninterest revenue ($B) $2.7 +5% $55.8 $52.8 $1.3 $(1.0) 2 2017 Adjusted PE / securities losses Market dependent Volume-driven growth 2018 and other 3 Debit and credit Merchant CWM Auto op. lease CIB CIB CB AWM card sales volume processing volume investments (avg.)4 assets (avg
Slide 18: Adjusted expense
Adjusted expense1 Adjusted expense ($B) CCB CIB CB AWM Corporate Net investments: $2.2B 57% adjusted overhead ratio1,2 $0.6 $0.6 <$66 $1.6 $(0.5) $63.3 ~29 Driven by: Driven by auto 28 Marketing lease depreciation Front office hiring3 New branches & ~21 21 market expansion Headquarters ~3 3
Slide 19: Credit – net charge-offs
Credit – net charge-offs 2018 2019 Outlook NCO rate NCOs ($B) NCO rate Home Lending1,2 (0.02)% $(0.0) ↔ Medium-term: Card 3.10% 4.5 ↔ Modestly higher on mix CCB Auto 0.38% 0.2 ↔ Business Banking3 0.49% 0.1 ↔ CIB 0.08% 0.1 ↔ CB 0.03% 0.1 ↔ AWM 0.01% 0.0 ↔ 1 Higher on Firmwide 0.53% $4.9 <$5.5B growth
Slide 20: Current Expected Credit Losses reserving standard (CECL)
Current Expected Credit Losses reserving standard (“CECL”) Implementation adjustment Day 1 CECL impact ($B) Estimated day 1 increase to reserves of 2018 Estimated $5B+/- or 35% largely driven by Card Credit implementation Estimates dependent on macro environment, reserves adjustment portfolio ch
Slide 21: Medium-term target for ROTCE
Medium-term target for ROTCE 21 19 Upside opportunities ~17% Potential downside risks 17 Slower deposit reprice Quicker deposit reprice 15 Constructive markets Challenged markets 13 Benign credit environment Higher credit costs continues 11 Higher capital 9 7 5 Medium-term target ~17% ROTC
Slide 22: Conclusion
Conclusion Exceptional client franchises Leading financial performance (medium-term outlook) ~17% ~55% ROTCE Overhead ratio Fortress balance sheet and principles ~12% 75-100% CET1 ratio Net payout ratio Long-term shareholder value 21
Slide 23: Agenda – Appendix – Fixed Income
Agenda Page 1 Appendix – Fixed Income 22 2 Notes 28
Slide 24: Continuing to optimize funding mix
Continuing to optimize funding mix Capital markets liabilities as of 12/31/18 ($B) Secured funding highlights Preferred Stock Long-term secured debt 5% $44B FHLB advances $2,623 Long-term $13B credit card securitization secured debt 11% Short-term secured debt $18B collateralized commercia
Slide 25: Managing maturity profile and TLAC efficiency
Managing maturity profile and TLAC efficiency JPMorgan Chase & Co. (HoldCo) unsecured long-term debt maturity profile ($B) 1 2 3 TLAC eligible TLAC callable notes Non-TLAC eligible $101 40 $22 $20 $16 $13 5 $13 7 2 60 13 15 10 9 2019 2020 2021 2022 2023 >2023 Maturity profile includes $128B of TLA
Slide 26: HoldCo benchmark issuance – TLAC continues to drive issuance
JPMorgan Chase & Co. (HoldCo) benchmark issuance – TLAC continues to drive issuance activity TLAC maturities and balance sheet drive issuance Issuance weighted towards USD due to relative economics Gross issuance by security type ($B) Senior debt Sub debt Preferred equity Gross issuance by currency
Slide 27: Firmwide wholesale long-term funding outstanding
Firmwide wholesale long-term funding outstanding End of period outstanding ($B) – Holding Company (left) vs. Bank1 (right) Senior unsecured Subordinated debt2 Structured notes FHLB Credit Card Securitization3 Other secured debt 4 WAM: ~8 years ~4 years $192 $196 $183 $188 27 29 21 24 20 17 16 21 $13
Slide 28: TLAC and external LTD requirement summary
TLAC and external LTD requirement summary – TLAC compliance is maintained Commentary TLAC Requirements – key metrics at 12/31/2018 ($B) Holding Company funding activity driven by Eligible Eligible External TLAC LTD Balance sheet evolution Eligible long-term debt $171 $161 TLAC maturities Prefe
Slide 29: Wholesale funding sources – purpose and key features
Wholesale funding sources – purpose and key features Available to meet regulatory requirement Multi- T1/T2 Product Typical term Callable TLAC LCR NSFR currency4 Reg. Cap. Senior Unsecured 2-30 years 4 4 4 7 4 4 Subordinated Debt 10-30 years1 4 4 4 4 4 4 Preferred Stock Perpetual 4 7 4 4 4 4 HoldCo S
Slide 30: Agenda – Appendix – Fixed Income Notes
Agenda Page 1 Appendix – Fixed Income 22 2 Notes 28
Slide 31: Notes on non-GAAP financial measures
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 results of
Slide 32: Notes on key performance measures
Notes on key performance measures 1. The Basel III regulatory capital, risk-weighted assets and capital ratios (which became fully phased-in effective on January 1, 2019) are all considered key regulatory capital measures. The capital adequacy of the Firm is evaluated against the Basel III approach
Slide 33: Notes on slide – Strong financial performance in 2018
Notes on slide 2 – Strong financial performance in 2018 on an absolute basis… 1. See note 1 on slide 28 2. See note 1 on slide 29 3. Net of stock issued to employees 4. See note 2 on slide 28 30
Slide 34: Notes on slide – …as well as relative to our peers
Notes on slide 3 – …as well as relative to our peers 1. See note 1 on slide 28 2. Amounts for GS and MS represent reported revenue 3. Managed overhead ratio = total noninterest expense / managed revenue; revenue for GS and MS is reflected on a reported basis 4. See note 2 on slide 28 5. Reflects com
Slide 35: Notes on slide – We have exceptional client franchises (1/2)
Notes on slide 4 – We have exceptional client franchises… (1/2) 1. Users of all web and/or mobile platforms who have logged in within the past 90 days 2. Users of all mobile platforms who have logged in within the past 90 days 3. Excludes Commercial Card; includes Liquid accounts 4. Kantar TNS (“TNS
Slide 36: Notes on slide – We have exceptional client franchises (2/2)
Notes on slide 4 – We have exceptional client franchises… (2/2) 12.Institutional Investor 13.Based on third-party / external data 14.Source of assets under custody (“AUC”): Company filings 15.S&P Global Market Intelligence as of December 31, 2018 16.Represents total JPMorgan Chase revenue from inves
Slide 37: Notes on slide – Gaining market share in nearly all businesses
Notes on slide 5 – …and we are gaining market share in nearly all of our businesses 1. Dealogic as of January 1, 2019 2. Coalition, preliminary 2018 market share analysis reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business structure 3. Based
Slide 38: Notes on slide – Proven best-in-class long-term performance
Notes on slide 6 – Proven best-in-class long-term performance 1. Represents EOP core loans, which are calculated as follows: EOP total loans less noncore loans. The CAGR for USB and PNC is based on total loans; noncore loans are defined as "liquidating" for WFC, and loans reported in the "All Other
Slide 39: Notes on slide – Macroeconomic backdrop
Notes on slide 7 – Macroeconomic backdrop 1. Federal Reserve as of December 18, 2018; J.P. Morgan Investment Bank Global Economic Research and DataQuery as of February 22, 2019 2. 2004 cycle dates; 06/04-06/06; quarterly results shown above. Excludes earnings credit rate (“ECR”) impact 3. J.P. Morga
Slide 40: Notes on slide – Evolution of the balance sheet (cont'd)
Notes on slide 9 – Evolution of the balance sheet (cont’d) 1. Totals may not sum due to rounding 2. In determining the 2014-2018 CAGR, non-operating balances used for 2014 reflect the average for the month of December 2014 and not the full year average. Non-operating balances include only those in C
Slide 41: Notes on slide – Evolution of regulatory framework
Notes on slide 11 – Evolution of regulatory framework 1. Supervisory Capital Assessment Program 2. Comprehensive Capital Analysis and Review 3. Total Loss Absorbing Capacity 4. Global Systemically Important Banks 38
Slide 42: Notes on slide – Noninterest revenue
Notes on slide 16 – Noninterest revenue 1. See note 1 on slide 28 2. Excludes a legal benefit related to a settlement with the FDIC receivership for Washington Mutual and with Deutsche Bank as trustee to certain Washington Mutual trusts and revaluation of tax-oriented investments related to the Tax
Slide 43: Notes on slide – Adjusted expense
Notes on slide 17 – Adjusted expense 1. See note 3 on slide 28 2. See note 1 on slide 28 3. Includes compensation expense related to increased hiring of revenue-producing bankers 40
Slide 44: Notes on Fixed Income Slide – Continuing to optimize funding mix
Notes on Fixed Income Slide 22 – Continuing to optimize funding mix 1. Includes federal funds purchased and client-driven loan securitizations which are included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets totaling ~$3B as of De
Slide 45: Notes on Fixed Income Slide – Firmwide wholesale long-term funding
Notes on Fixed Income Slide 25 – Firmwide wholesale long-term funding outstanding 1. Senior unsecured for banking subsidiaries includes subordinated debt of $7.7B and $3.9B in 2015 and 2016, respectively, and $0.3B in both 2017 and 2018 2. Includes junior subordinated debt 3. Includes $1.8B and $1.5
Slide 46: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks an
Slide 47: Investor Day 2019 – Corporate & Investment Bank
Investor Day 2019 | February 2019 February 26, 2019
Slide 48: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 49: We delivered strong results and had a record year in 2018
ANIMATION We delivered strong results and had a record year in 2018 Adjusted revenues1 and income2 ($B) CIB ROE3 13% 14% 16% 14% 16% Capital ($B) $61 $62 $64 $70 $70 50 30% 45 $36.4 $35.1 $34.6 25% 40 $33.3 ■ Revenue1 $32.9 20% 35 18% 20% 16% 15% 30 14% 15% 15% ◆ Heritage TSS ROE 25 14% Heritage IB
Slide 50: Expenses increased due to higher revenues and additional investments
Expenses increased due to higher revenues and additional investments 2017 to 2018 ($B)1 $0.4 $0.3 $0.1 $20.7 $0.5 $19.4 2017 Revenue- Tech Non-tech Other 2018 related growth investments investments O/H ratio 56% 57% 1 Expense adjusted for legal expense 2
Slide 51: ROE increased from 14.5% in 2017 to 15.9% in 2018
ROE increased from 14.5% in 2017 to 15.9% in 2018 0.8% 15.9% (1.7)% (0.1)% 14.5% 1.3% 1.1% 20172017 Actual Revenue Rates Expenses Credit Cost Tax 20182018 Actual & Other 3
Slide 52: CIB gained market share faster than peers
CIB gained market share faster than peers, strengthening our leadership across businesses Gaining market share at a faster rate than any of our peers Strengthening global leadership positions across businesses Global CIB Market Share1,2 No. of businesses where JPM is ranked3,4 ■ #1 ■ #2-3 1■ #4-6 20
Slide 53: Global Investment Banking grew share across all regions
Global Investment Banking (GIB) grew share across all regions resulting in 8.7% market share in 2018 (highest since 2009) GIB Wallet ■ Industry wallet ($B) ◆ Market share M&A ■ Industry wallet ($B) ◆ Market share 8.9% 8.0% 8.4% 8.3% 8.4% 8.7% 8.0% 7.8% 7.9% 8.1% $28 $25 $26 $22 $24 2014 2015 2016 20
Slide 54: Markets business continued to increase market share
Markets business continued to increase market share across products while delivering strong returns Equities1 Global Markets market share (%)1,2,3 ■ Industry wallet ($B) 2018 vs. 2014 2018 vs. 2017 ◆ Market share 15.0% 11.2% JPM +2.8% +0.9% 9.8% 9.9% 7.9% 8.4% Peer 1 Peer 2 $62 $68 $59 $59 $62 Peer
Slide 55: CIB Treasury Services business has grown significantly since 2016
CIB Treasury Services business has grown significantly since 2016 through a combination of rising rates and organic growth Strong growth in CIB TS revenue and operating leverage Strong growth in deposits… ■ Revenue ($B) CAGR ■ Operating Deposits CAGR ■ Expenses 2016-18 ■ Non-Operating Deposits 2016-
Slide 56: Securities Services continues to transform itself
Securities Services continues to transform itself; unprecedented new business wins and improved operating models have yielded record financial results Winning industry-leading mandates… …resulted in highest recorded revenue and operating margins ■ Assets Under Custody ■ Revenue ($B) ■ Operating Marg
Slide 57: Continued focus on technology investments, productivity and efficiency
We continue to focus on technology investments, productivity and efficiency We continue to invest in… Best in class client experiences Resilient and scalable infrastructure Digital, seamless, omni-channel user experiences Multi-cloud, hybrid-cloud strategy Focus on personalization and inte
Slide 58: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 59: Select Markets topics for today
Select Markets topics for today Multi-year performance, especially in Cash Equities and Prime Finance Growth in Equities Key focus areas for the Equities franchise going forward Impact of Drivers of electronification and its impact on client needs electronification Pace of electronification
Slide 60: Equities franchise has steadily gained market share
Our Equities franchise has steadily gained market share across our key products, benefiting from multi-year investments in execution capabilities Our market share increased 330bps over the last 5 years… …driven by improved performance across all products Market share1,2,3 ■ 2014 ■ Increase from 2014
Slide 61: Sustained investments in Cash Equities spurred growth
Sustained investments and focus in Cash Equities has spurred substantial growth Global Cash Equities revenue Increase in share of Cash Equities volumes driven by Low Touch NOT TO SCALE CAGR ■ Total JPM Cash Equities volume as a % of total market volume ■ High Touch 2014-18 ■ Low Touch JPM volume as
Slide 62: Market share gains yielded record revenue in Prime Finance
Market share gains in all regions yielded record revenue and client balances in Prime Finance Prime Finance Client Balances by Product Region Synthetics as a % of Total Global Prime Finance Revenue NOT TO SCALE NOT TO SCALE CAGR CAGR ■ U.S. ■ Synthetic ■ EMEA 2014-18 ■ Cash 2014-18 ■ APAC +10% ◆ Tot
Slide 63: Equities franchise will continue technology and talent investments
Equities franchise will continue to pursue technology and talent investments Pillars of our strategy Invest in product and Expand scale and Enhance coverage, service technology geographic reach and operational framework 2019 performance will be market dependent but expect scale, liquidity solutions
Slide 64: Electronification drivers and need for sophisticated execution tools
Electronification has been primarily driven by two types of factors and has created an even greater need for more sophisticated execution tools Key types of electronification drivers Illustration of impact over last few years Electronification driven by client and dealer demand FX Spot for choice,
Slide 65: Investing in technology for more sophisticated execution tools
We are investing in technology to provide clients with more sophisticated execution tools Example: Algo Central Single entry point providing seamless access to JPM’s execution algos and analytics to help reduce costs Rich analytics Tailored Execution Access to pre-trade Ability to customize pr
Slide 66: Pace of electronification varied across FICC products
ANIMATION Pace of electronification has varied across different FICC products Electronification for select FICC asset classes Key observations Expected scenario 2018-20202 Current Electronification 1 Interest Rate Swaps % Electronic1 (Investor day 2016) (Investor day 2019) Higher Electronic RFQ vo
Slide 67: Strengthening our diversified client franchise
We remain highly committed to strengthening our diversified client franchise, building on top of our consistent Markets wallet growth with Institutional and Corporate clients Institutional clients1 Corporate clients2 ◆ JPM market share with Institutional clients JPM Institutional clients revenue mix
Slide 68: Investing to address clients' evolving needs
Going forward, we are investing to address clients’ evolving needs for capital and risk solutions Enhanced client Next-gen analytics Best-in-class execution experience Increased continuity and simplified Providing client access to next generation Quick, efficient and secure access, workflow be
Slide 69: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 70: Wholesale Payments recorded $11B revenue
Wholesale Payments recorded $11B revenue and grew by 28% over the last two years Wholesale Payments revenue growth1, $B Total revenue growth 2016-2018 28% $11.2 Wholesale Payments #1 Treasury Services bank includes following services worldwide delivered to clients across $8.81 #1 Merchant Acquir
Slide 71: Wholesale Payments products across clients of all sizes
We bring the entire suite of Wholesale Payments products across our clients of all sizes and complexities Corporates Commercial Multinational Middle Market Card Corporations Companies Treasury Services Small Businesses Wholesale Payments Financial Institutions Merchant Banks & Broker- Non-Bank Finan
Slide 72: Strong performance in Firmwide Treasury Services
Our strong performance in Firmwide Treasury Services over the course of the last two years has made us a market leader FY2016 Competitor Revenue Benchmark1 FY2018 Competitor Revenue Benchmark1 ■■ CIB Total 2016-2018 change ■■ CIB ■■ Non-CIB 40% ■■ Non-CIB $8.8B 25% 37% $6.3B 24% Peer 1 JPM Peer 2 Pe
Slide 73: Integrated Wholesale Payments strategy
We are creating a unique value proposition for our clients through our integrated Wholesale Payments strategy Our Wholesale Payments strategy… Any product, Flexible channel Real-time analytics anywhere connectivity & optimization Accept and collect from any Enable clients to connect to us in P
Slide 74: Platforms and innovation: JPM Coin, IIN, Merchant Acquiring
1 platforms scalableWeglobal, to makeprogressondelivering continue JPM Coinis prototype.a Core PaymentsCore Innovation Merchant PLATFORMS Coin JPM Helix 1 Acquiring JPMorganChasewill complete satisfy complete internalall proceduresand First U.S.First bank Interbank Information Networ
Slide 75: Interbank Information Network and JPM Coin
Interbank Information Network and JPM Coin: examples of Wholesale Payments innovation Interbank Information Network JPM Coin1 Eliminating Information Inefficiencies Will Enable 24/7/365 Global Value Transfer Current model IIN Vision Digital coin designed to facilitate instantaneous payments using
Slide 76: Product innovation delivered over the past 12 months
Product innovation delivered over the over the past 12months delivered Product innovation PLATFORMS Payments Real Automation Digitization / Management Virtual Account MassPay Global Banking APIs& Open - Time Clients Clients across First 98%+ Account opening in < Industry ~40 curren
Slide 77: U.S. Real-Time Payments: product innovation at scale
U.S. Real-Time Payments: product innovation at scale Announcement and Use case development Integration Acceleration 1prioritization of use cases 2 and Roll-out 3 4 Live in November 2017 Roll-out with pilot clients and Fully integrated with Chase.com – Full roll-out to Chase enterprise provid
Slide 78: eCommerce platform: end-to-end Wholesale Payments solutions
eCommerce platform: Example of our end-to-end Wholesale Payments solutions and benefits Consumers pay for goods eCommerce platform manages funds Flexible pay-outs to merchants Consumer pays inz local currency via Funds are received and stored in Funds due to merchants are paid out their preferred me
Slide 79: Strategic focus on treasury and payments needs
Our strategic focus is to be the leader in delivering solutions to meet all of our clients’ treasury and payments needs Middle Market and Large Multinational FIG (Banks, NBFIs Small Businesses Corporates and Public Sector) Bundled solutions for payment needs, Consultative approach to design Gl
Slide 80: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 81: Expense walkforward 2018 to 2019 Outlook
Expense walkforward (adjusted) 2018 to 2019 Outlook ($B)1 $0.3 $0.2 $20.7 $0.1 ~$21 $(0.4) 2018 Revenue-related growth Tech investments Non-tech investments FDIC / Other 2019 Outlook 1 Expense adjusted for legal expense 30
Slide 82: ROE Walk: 2018 Actuals to Medium-term target
ROE Walk: 2018 Actuals – Medium-term target (2.2)% ~3% ~(0.5)% ~16% 15.9% Revenue ~$40B Overhead Ratio 54%+/- Capital $80B 2018 Net growth Higher capital Other Medium-term 31
Slide 83: Maintaining discipline, optimizing current model, transforming for the future
We remain focused on maintaining day-to-day discipline, optimizing our current model and transforming for the future Optimizing our current Transforming for the Maintaining day-to-day model future discipline Continuous focus on client Closing addressable gaps1 in Investing in new and emerging tech e
Slide 84: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 85: Notes on slide – We delivered strong results and record year
Notes on slide 1 – We delivered strong results and had a record year in 2018 Notes 1. Adjusted revenue excludes the impact of business simplification initiatives. As a result, adjusted revenue is lower by $1.9 billion, $353 million, $220 million, $86 million and $47 million for 2014, 2015, 2016, 201
Slide 86: Notes on slide – CIB gained market share faster than peers
Notes on slide 4 – CIB gained market share faster than peers, strengthening our leadership across businesses Notes 1. CIB market share analysis – Source: Coalition. Market share analysis reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business str
Slide 87: Notes on slide – Markets business market share
Notes on slide 6 – Markets business continued to increase market share across products while delivering strong returns Notes 1. Source: Coalition, preliminary 2018 market share analysis reflects JPMorgan Chase’s share of the global industry revenue pool and is based on JPMorgan Chase’s business stru
Slide 88: Notes on slide – Equities franchise market share
Notes on slide 11 – Our Equities franchise has steadily gained market share across our key products, benefiting from multi-year investments in execution capabilities Notes 1. Source: Coalition 2018 preliminary Competitor Analytics. Equities Market Share reflects share of the global industry revenue
Slide 89: Notes on slide – Pace of electronification
Notes on slide 17 – Pace of electronification has varied across different FICC products Notes 1. % Electronic is based on notional volume executed through Single Dealer Venues, Multi Dealer Venues / Non-Central Limit Order Books and All-to-all / Central Limit Order Books 2. Source: JPMorgan Chase’s
Slide 90: Notes on slide – Diversified client franchise
Notes on slide 18 – We remain highly committed to strengthening our diversified client franchise, building on top of our consistent Markets wallet growth with Institutional and Corporate clients Notes 1. Source: Coalition Institutional Wallet Analytics – based on the leading 1,300 Institutional Clie
Slide 91: Notes on slide – Firmwide Treasury Services
Notes on slide 22 – Our strong performance in Firmwide Treasury Services over the course of the last two years has made us a market leader Notes 1. Source: Coalition, preliminary FY18 competitor analysis. Analysis reflects TS revenues (excluding Commercial Cards) across CIB and non-CIB and is based
Slide 92: Notes on slide – Day-to-day discipline and transforming
Notes on slide 32 – We remain focused on maintaining day-to-day discipline, optimizing our current model and transforming for the future Notes 1. Source: Coalition, preliminary FY18 Competitor Analytics. Gap analysis reflects addressable gap to the product leader across multiple asset-classes by reg
Slide 93: Consumer & Community Banking – February 26, 2019
[Do not refresh] February 26, 2019
Slide 94: Agenda
[Do not refresh] Agenda Page 1 Overview 1 2 Consumer Banking 10 3 Home Lending 17 4 Card 27 5 Closing remarks 42 6 Notes 43
Slide 95: Consistent set of strategic priorities
[Do not refresh] We remain focused on a consistent set of strategic priorities Deliver One Chase experiences that provide choice, security, ease, personalization, and integrated payments Create interoperability between physical and digital channels to provide seamless omni-channel experiences fo
Slide 96: Significant progress against our commitments
[Do not refresh] We have made significant progress against our commitments We have committed to… …and have delivered on those promises Relationships with ~50% of U.S. households – of which 25% have a multi-LOB relationship Deliver One Chase experiences to grow share from a position of strength ~
Slide 97: Performance targets
[Do not refresh] Performance targets Consumer & Community Banking targets 2019 2017 2018 outlook Business Banking Net charge-off rate 0.57% 0.49% Home Lending Net charge-off / (recovery) rate1 0.03% (0.02%) Net charge-off rate 2.95% 3.10% Medium-term: Modestly higher on mix Card Services Net revenue
Slide 98: Continuous investment driving momentum across key business drivers
[Do not refresh] Continuous investment is driving strong momentum across key business drivers Key business drivers ($B, except ratios and where otherwise noted) 2018 YoY ∆ Households (mm) 61.7 1% Small businesses (mm) 4.2 5% Consumer & Active digital customers1 (mm) 49.3 5% Community Banking Active
Slide 99: Volume-driven growth and rate benefit drove top-line results
[Do not refresh] Volume-driven growth and rate benefit drove strong top-line results for the year CCB revenue ($B) $1.9 $0.4 $52.1 $3.3 $46.5 2017 Volume-driven Interest rate impact¹ Other² 2018 revenue growth Note: Numbers may not sum due to rounding 1 Includes Home Lending production revenue margi
Slide 100: Improved operating leverage while continuing to invest
[Do not refresh] We improved our operating leverage while continuing to invest and grow 2017 2018 2019 Revenue $46.5B $52.1B Flat for 2020 and 2021 Expense $26.1B $27.8B ~$29B ex-auto lease growth Overhead ratio 56% 53% Headcount1 ~140K ~135K 1 Includes employees and contractors. 2017 excludes Comme
Slide 101: Investments enabled self-service and lowered costs
[Do not refresh] Our investments made it easier for customers to self-serve and enabled operational efficiencies and workforce transformation, which have lowered costs Reduction in cost to serve1 per CCB household Efficiency examples of transactions completed (~15%) Customer behavior >80% shift thro
Slide 102: Portfolio of investments to fuel long-term results
[Do not refresh] We have a portfolio of investments that will fuel long-term results Technology investments in 2018 are expected to generate: Increasing efficiency >$1B in annual run-rate savings1 ROI2 of >2x Created differentiated experiences (e.g., QuickPay with Zelle®, Digital Account Ope
Slide 103: The power of our digital platform
The power of our digital platform Our digital platform is embedded in our customers’ daily lives… …creating an ecosystem that drives engagement3 Net Promoter Score4 10 points 1 49mm Active digital customers Customers are more satisfied… Monthly digital logins per customer2 All other households Digit
Slide 104: Agenda
[Do not refresh] Agenda Page 1 Overview 1 2 Consumer Banking 10 3 Home Lending 17 4 Card 27 5 Closing remarks 42 6 Notes 43
Slide 105: Significant progress against our priorities
We have made significant progress against our priorities Acquire and Grew Consumer Banking deposit & investment balances by $215B since 20141 deepen relationships Acquired 2.5mm net new households since 20142 3 Increase 75% of new customers are mobile-active after 6 months engagement 22mm mo
Slide 106: Growing at an industry-leading pace
We continue to grow our business at an industry-leading pace, winning with both new and existing customers We are growing at an industry-leading pace… …by winning with both new and existing customers Four year deposit growth1 Share of new primary bank 2014 – 2018 CAGR relationships in 2017 and 20182
Slide 107: Digital platforms make it easier for customers to self-serve
Our investments in digital platforms and functionality have made it easier for customers to self-serve largest active mobile banking fastest-growing mobile banking #1 customer base among U.S. banks1 #1 customer base among U.S. banks1 Everyday digital activities enabled by Chase Manage your Split a b
Slide 108: Physical network critical to industry-leading deposit growth
Our physical network has been critical to achieving industry-leading deposit growth As we strengthen our self-service capabilities, customers are transacting at the teller line less often… …but still highly value a physical presence Average teller transactions per customer1 Convenient branch locatio
Slide 109: Innovating across channels and the customer lifecycle
We are innovating across our channels and throughout the customer lifecycle Open Manage Deepen Digital Account Opening reduced First retail U.S. bank to send external Increasing engagement and banker time to open an account to 3 – 5 transfers within 15 seconds via the productivity through new
Slide 110: Expanding our physical network to attractive new markets
We are effectively expanding our physical network to attractive new markets Drivers of effective market expansion Delivering Chase to more of the U.S. Attractive markets: Large, fast-growing expansion markets, including three of the top 10 markets, which alone U.S. customers in-footprint2 represen
Slide 111: Well-positioned for long-term financial success
We are well-positioned for long-term financial success and industry outperformance Acquire and Expand our physical footprint to cover 93% of the U.S. population by the end of 2022 (up from 69% before deepen market expansion), allowing us to reach 80mm more U.S. consumers1 relationships Continue
Slide 112: Agenda
[Do not refresh] Agenda Page 1 Overview 1 2 Consumer Banking 10 3 Home Lending 17 4 Card 27 5 Closing remarks 42 6 Notes 43
Slide 113: High-quality, customer-focused Home Lending business
[Do not refresh] We continue to build a high-quality, customer-focused Home Lending business ✓ We are taking a disciplined approach to growth Maintain excellent Strong portfolio credit quality (average FICO 756, average CLTV 57%)1 origination credit quality Loan balances optimized for liquidity
Slide 114: Home lending industry is in a state of transition
[Do not refresh] The home lending industry is in a state of transition Profitability remains challenged across the industry as origination volume continues to decrease, spreads compress, and production costs rise Primary2 / Secondary3 mortgage rate spread and Mortgage origination market1 ($B) indust
Slide 115: Intentional positioning across production, servicing and portfolio
[Do not refresh] We are being intentional in our positioning across production, servicing, and our portfolio Key business drivers ($B, except ratios where otherwise noted) 2017 2018 YoY Δ Total mortgage origination volume $98 $79 (19%) Home Lending Consumer origination volume $40 $38 (5%) Production
Slide 116: Successfully rebalanced our loan portfolio
[Do not refresh] We have successfully rebalanced our loan portfolio Home Lending average loan balances ($B) 2014 – 2018 CAGR Core Non-core $232 $242 Total: +7% Non-core1: $53 We have recalibrated our $183 (17%) $81 portfolio from ~40% to ~80% core between 2014 and 2018 $114 We will continue to m
Slide 117: Portfolio credit quality continues to improve
[Do not refresh] Portfolio credit quality continues to improve and is extremely strong… % of Home Lending portfolio with FICO < 700 Home Lending1 30+ delinquency rate Home Lending net charge-off / (recovery) rate2 and CLTV > 80%3 3.0% (52) bps (~90%) 0.50% 2.0% Reflects the impact of Hurricanes Irma
Slide 118: De-risking our servicing business
[Do not refresh] …and we continue to de-risk our servicing business, which will protect us in a downturn 30+ delinquency rate2 for Chase 2014 – 2018 Chase servicing book activity servicing book vs. industry3 (%) Servicing cost per unit ($)4 3 “Coming In” Dec. 2014 through Dec. 2018 Industry Chase (2
Slide 119: Delivering for our customers despite challenging market
[Do not refresh] Despite a challenging market, we are committed to delivering for our customers % of Chase mortgage customers who subsequently Of existing Chase deposit customers Home Lending Net Promoter Score1 opened other products2, by mortgage satisfaction level3 who opened a mortgage: All other
Slide 120: Deepening relationships with core Home Lending customers
[Do not refresh] We are deepening relationships with our core Home Lending customers, and building on our existing momentum… We are focused on deepening relationships with our core Home Lending Growth to-date with our primary bank customers customers through targeted objectives to meet their unique
Slide 121: Simplifying the digital mortgage process
[Do not refresh] …by simplifying the digital mortgage process and providing differentiated experiences for Chase customers … and have a foundation of differentiated solutions We offer a digitally-enabled fulfillment process through Chase MyHome1 … to deliver to Chase customers Transparent Customers
Slide 122: Continue to build high-quality Home Lending business
[Do not refresh] We continue to build a high-quality, customer-focused Home Lending business Maintain excellent origination ✓ credit quality We are taking a disciplined approach to growth Improve quality of servicing Our portfolio de-risking positions us well through the credit cycle, and we plan to
Slide 123: Agenda
[Do not refresh] Agenda Page 1 Overview 1 2 Consumer Banking 10 3 Home Lending 17 4 Card 27 5 Closing remarks 42 6 Notes 43
Slide 124: Executing on a clear strategy
[Do not refresh] We are executing on a clear strategy Build scale with great products Invest in Deliver and marketing product valuable launches and customer- partner centric Engage our customers to drive renewals High offerings quality profitability and lower attrition growth Deepen relationships ac
Slide 125: Scale: sustained investment created tremendous scale
[Do not refresh] Scale Our sustained investment in products and customer acquisition has created tremendous scale We launched several compelling, new products… We are operating from a position of strength in credit card spend (22% share)2 and #1 outstandings (17% share)3 Freedom Unlimited ® Sapphire
Slide 126: Scale enables strong top-line growth
[Do not refresh] Scale This scale enables strong top-line account, sales, outstandings, and revenue growth Active accounts Sales volume1 EOP outstandings Revenue 6% CAGR 2% CAGR 10% CAGR 5% CAGR 2014 2018 2014 2018 2014 2018 2014 2018 Select examples of growth drivers New products and Investment in
Slide 127: Scale has created cost efficiencies
[Do not refresh] Scale Importantly, our scale has also created cost efficiencies Increased operating leverage Improved operating efficiency Overhead ratio Contact cost per statement1 (1ppt) (1ppt) (10%) 2014 2018 2019E 2014 2018 Improved marketing efficiency Reduced fraud losses Credit card sales ge
Slide 128: Engage: value of engaging our large customer base
[Do not refresh] Engage Our experience has shown the value of engaging our large customer base Ultimate Rewards® redeemers have higher sales and revenue, with lower attrition1,2 Annual sales Annual revenue 12-month attrition 4.0x 4.2x 2.0x 1.4x 2.2x 1.6x None One Multiple None One Multiple None One
Slide 129: Three fundamental levers to drive engagement
[Do not refresh] Engage We have three fundamental levers to drive engagement Engagement Innovative products Loyalty Experiences Bringing best-in-class products Moving beyond points to strengthen Building everyday customer experiences to our customers customer loyalty Scale 32
Slide 130: My Chase Plan will make borrowing easier
[Do not refresh] Engage My Chase PlanSM will make borrowing easier for our customers For planned purchases with a payment plan at a reasonable cost Opportunity: outstandings held off-us ~$250B by existing customers1 1 Total outstanding balances on non-Chase cards by existing Chase consumer card cust
Slide 131: My Chase Loan enables customers to use existing line
[Do not refresh] Engage My Chase LoanSM will enable our customers to better use their existing line to borrow For larger purchases, including non-cardable spend, with equal payments at a competitive rate Opportunity: outstandings held off-us ~$250B by existing customers1 1 Total outstanding balances
Slide 132: Chase Offers engagement in first few months
[Do not refresh] Engage Chase Offers SM has seen tremendous engagement in the first few months Chase OffersSM Providing both customers and merchants with real value 1 Chase connects customers 2 Customers love getting money to merchants who deliver in their pocket and continue to real value through O
Slide 133: Credit Journey drives repeat engagement
[Do not refresh] Engage Credit JourneySM drives repeat customer engagement and familiarity with Chase for prospects Credit Journey SM will deliver value for our customers and returns for the franchise Access to your credit score View historical scores and see Receive tailored pre-approved offers and
Slide 134: Tap to pay makes using your Chase card faster
[Do not refresh] Engage Tap to pay makes using your Chase card faster and simpler Chase customers can “tap to pay” using contactless cards Tap to pay has already experienced meaningful adoption Customer adoption of tap to pay vs. digital wallet1 2.4x Digital wallet Tap to pay Tap to pay already exce
Slide 135: Deepen: engagement improves ability to deepen relationships
[Do not refresh] Deepen Engagement improves our ability to deepen relationships across Chase Likelihood to adopt a second product1: Spend engagement2 Mobile activity3 Credit JourneySM enrollment4 ~2x ~2x ~1.5x Low engaged High engaged Mobile inactive Mobile active Not enrolled in Credit Enrolled in
Slide 136: Deepened relationships give risk management advantages
[Do not refresh] Deepen Deepened relationships give us unique risk management advantages Critical components of disciplined underwriting… …drive better risk decisions Approval rate1 Detection Improved monitoring ~2.5x leveraging expanded data sources Non-card Chase No deposit relationship Deposit re
Slide 137: Prepared for any economic scenario with strong risk management
[Do not refresh] We are prepared for any economic scenario with strong risk management capabilities New risk monitoring capabilities enable surgical pullbacks… …which improved portfolio NCOs with limited impact to growth Data for the Net charge-offs (%) 1 Portfolio Portfolio without pullback example
Slide 138: Clear strategy, risk management and franchise differentiators
[Do not refresh] Our clear strategy, risk management, and franchise differentiators will ensure high quality growth We have a clear strategy to scale, engage, and deepen… … and all the ingredients for sustainable success Unmatched scale and distribution Proprietary rewards platform Invest i
Slide 139: Agenda
[Do not refresh] Agenda Page 1 Overview 1 2 Consumer Banking 10 3 Home Lending 17 4 Card 27 5 Closing remarks 42 6 Notes 43
Slide 140: Focused on executing against our strategy
[Do not refresh] We remain focused on executing against our strategy Drive engagement by introducing innovative lending products, strengthening customer loyalty and Deliver One Chase experiences to creating everyday customer experiences grow from a position of strength Expand branch network to 1
Slide 141: Agenda
[Do not refresh] Agenda Page 1 Overview 1 2 Consumer Banking 10 3 Home Lending 17 4 Card 27 5 Closing remarks 42 6 Notes 43
Slide 142: Notes on slide – Significant progress against our commitments
[Do not refresh] Notes on slide 2 – We have made significant progress against our commitments 1. Source: FDIC 2018 Summary of Deposits survey per S&P Global Market Intelligence. Excludes non-retail branch locations and all branches with $500mm+ in deposits within the last two years (excluded branche
Slide 143: Notes on slide – Investments made it easier to self-serve
[Do not refresh] Notes on slide 7 – Our investments made it easier for customers to self-serve and enabled operational efficiencies and workforce transformation, which have lowered costs 1. Cost to serve defined as total CCB expense less investments, auto lease depreciation, legal losses, and FDIC s
Slide 144: Notes on slide – The power of our digital platform
Notes on slide 9 – The power of our digital platform 1. Users of all web and/or mobile platforms who have logged in within the past 90 days 2. Reflects 90-day digital logins among 90-day active users divided by three to estimate average monthly logins. Data reflects December 2016, December 2017, and
Slide 145: Notes on slide – Significant progress against our priorities
Notes on slide 10 – We have made significant progress against our priorities 1. Represents average deposits and end of period investment balances 2. Includes Consumer Banking households 3. Represents Consumer Banking customers that are 90-day mobile-active six months after account opening. Includes
Slide 146: Notes on slide – Industry-leading pace of growth
Notes on slide 11 – We continue to grow our business at an industry-leading pace, winning with both new and existing customers 1. #1 in absolute deposit dollar balance growth from 2014 to 2018. Source: FDIC 2018 Summary of Deposits survey per S&P Global Market Intelligence. Excludes non-retail branc
Slide 147: Notes on slide – Digital platforms and functionality
Notes on slide 12 – Our investments in digital platforms and functionality have made it easier for customers to self-serve 1. Based on 4Q18 peer disclosure for JPM's Consumer & Community Banking, BAC's Consumer Banking, WFC's Community Banking and Citi’s North America GCB segments. #1 growth in term
Slide 148: Notes on slide – Physical network and deposit growth
Notes on slide 13 – Our physical network has been critical to achieving industry-leading deposit growth 1. Average teller transactions among all Consumer Banking customers. Represents 4Q14 and 4Q18 2. Novantas Customer Knowledge, 2018 U.S. Shopper Study. Prospective switchers (N=4,866). Convenient b
Slide 149: Notes on slide – Innovating across channels and lifecycle
Notes on slide 14 – We are innovating across our channels and throughout the customer lifecycle 1. Median existing customer opened account via Digital Account Opening (“DAO”) in ~3 minutes. Median new-to-bank customer opened account via DAO in ~5 minutes. Does not include time to open an account via
Slide 150: Notes on slide – Expanding physical network to new markets
Notes on slide 15 – We are effectively expanding our physical network to attractive new markets 1. FDIC 2018 Summary of Deposits survey per S&P Global Market Intelligence. Excludes non-retail branch locations and all branches with $500mm+ in deposits within the last two years (excluded branches are
Slide 151: Notes on slide – Home lending industry in transition
[Do not refresh] Notes on slide 18 – The home lending industry is in a state of transition 1. Source: Inside Mortgage Finance (“IMF”) 2. Source: Freddie Mac Primary Mortgage Market Survey (“PMMS”). Represents 30-year fixed rate 3. Source: JPMorgan Chase Securitized Products Group (“SPG”) Research. R
Slide 152: Notes on slide – De-risk our servicing business
[Do not refresh] Notes on slide 22 – …and we continue to de-risk our servicing business, which will protect us in a downturn 1. 30+ delinquency rate for total "in flows" as of December 2018. Total "out flows" at time of transfer 2. Source: IMF. Includes all loans past due and in foreclosure 3. Indus
Slide 153: Notes on slide – Deepening relationships with Home Lending customers
[Do not refresh] Notes on slide 24 – We are deepening relationships with our core Home Lending customers, and building on our existing momentum… 1. Primary relationship based on internal JPMorgan Chase definition 2. Based on JPMorgan Chase internal analysis 3. Represents Chase’s percentage share of
Slide 154: Notes on slide – Sustained investment created scale
[Do not refresh] Notes on slide 28 – Our sustained investment in products and customer acquisition has created tremendous scale 1. “Credit Card Market: Cobrand Market Share by Issuer,” Phoenix, October 2018. For 1H18, based on number of accounts, total spend, and revolving balance dollars 2. Represe
Slide 155: Notes on slide – Scale created cost efficiencies
[Do not refresh] Notes on slide 30 – Importantly, our scale has also created cost efficiencies 1. Reflects customer service expense per statement 2. Reflects year 3 sales on domestic acquisitions. Acquisition marketing excludes media 3. Fraud losses exclude disputes 56
Slide 156: Notes on slide – Engagement improves ability to deepen relationships
[Do not refresh] Notes on slide 38 – Engagement improves our ability to deepen relationships across Chase 1. Analysis shows difference in percentage of in-footprint, Chase consumer card-only customers, who opened a deposit relationship after 18 months, as of June 2017 2. Low-spend engagement is defi
Slide 157: Asset & Wealth Management – February 26, 2019
ASSET & WEALTH MANAGEMENT February 26, 2019 JP MORGAN CHASE & Co.
Slide 158: AWM delivers superior client outcomes and consistent financial performance
AWM delivers superior client outcomes and consistent financial performance A Consistent through-the-cycle B Client-centric C Next-generation growth Leading long-term investment performance Fiduciary for institutions, advisors, and Digital everything individuals for nearly 200 years Increasin
Slide 159: Consistent: Reliable growth engine with strong ROE
A Consistent: Reliable growth engine with strong ROE Record Revenue ($B)1 Pretax income ($B) Client assets (EOP, $T) 5-yr 5-yr 5-yr 2013 2014 2015 2016 2017 2018 CAGR 2013 2014 2015 2016 2017 2018 CAGR 2013 2014 2015 2016 2017 2018 CAGR $2.8 $14.1 $3.7 $2.7 $13.8 3.1% $3.6 2.0% 3.1% $2.3 AUS + AUM $
Slide 160: Consistent: Diversified revenue growth
A Consistent: Diversified revenue growth Revenue ($B)1 +$2.0 +$0.9 $(0.6) $(0.5) +$0.9 $14.1 +$1.3 $12.1 2013 Banking Markets Flows Pricing & other Simplification 2018 Numbers may not tie due to rounding Note: For footnoted information, refer to slide 16 3
Slide 161: Consistent: Simplify for growth – expense
A Consistent: Simplify for growth Expense ($B)1 +$1.7 +$0.7 $(0.8) +$1.0 $10.4 +$0.8 $8.7 2013 Enterprise / Revenue / Growth initiatives Simplification 2018 controls spend performance-driven Numbers may not tie due to rounding Note: For footnoted information, refer to slide 16 4
Slide 162: Consistent: Simplify for growth – key initiative metrics
A Consistent: Simplify for growth Key initiative metrics over past two years +125 +17 +464 +276 New products: funds launched1 Front office locations opened New hires into high-growth Modernized apps launched business segments +40 +12 +361 +143 +25 +133 +22 +18 Growth +10 +10 +3 +66 +2 +37 0 Equity F
Slide 163: Consistent: Actively reducing costs for our clients
A Consistent: Actively reducing costs for our clients What we’ve done Example Savings for clients $350 million Largest equity JPMC Fees1 per year fund fees 20% $200 million External trading Equity bps commissions per trade per year 46% Large cap Third-party fund fees $75 million beta fees per year 5
Slide 164: Consistent: Leading long-term investment performance
A Consistent: Leading long-term investment performance 2018 % of JPMAM long-term mutual fund AUM over peer median (net of fees)1 >74% 50-74% 25-49% 0-24% 1-year 3-year 5-year 10-year Total 73% JPMAM 68% 73% 85% 83% Equity 65% 7474%% 85% 93% 65% Fixed 78% Income 78% 71% 78% 59% 78% Multi-Asset Soluti
Slide 165: Consistent: Diversification drives flows
A Consistent: Diversification drives flows 5Y Total Client Asset Flows ($B) Publically-traded peers only 123 127 100 97 89 82 #1 BLK2 $1,037 71 50 JPMC Total Client Asset 36 Flows ($B)1 28 3 Legend #2 JPMC $443 ≥$0 <$0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Fixed Income Equity CWM4 flows
Slide 166: Client-centric: Alpha engines drive growth
Legend JPM CAGR B Client-centric: Alpha engines drive growth Industry CAGR Core JPMAM Solutions AUM1 5Y % over peer median2 AUM 4% 4% EM & Asia 81% JPMAM Pacific Equity Core Solutions International 61% 16% Funds 85% 12%3 U.S. 96% 2013 2018 AUM1 5Y % over peer median2 SmartRetirement 5% 5% Unconstrai
Slide 167: Client-centric: Successfully innovating across our platform
B Client-centric: Successfully innovating across our platform Hedged Equity Fund JPST: Ultra-Short Income ETF 5Y annualized return: 3rd percentile1 8.5% 2.2% 2.1% 1.9% 5.8% Morningstar rating2 1.7% 1.7% 1Y Net 1.6% 1.5% Return: 2.1% 6th #1 in 2018 Flows 6 Morningstar category rank3 percentile
Slide 168: Client-centric: Advising individuals on both sides of balance sheet
B Client-centric: Advising individuals on both sides of their balance sheet Deposits Credit WM year-end spot balance ($B) WM year-end spot balance ($B) 1 Net inflow from new clients Jumbo mortgages +9% Loans (ex-mortgages) CAGR 148 131 118 18% 111 CAGR 162 104 156 95 147 146 138 ~$50B Cumulative net
Slide 169: Next-generation growth: Digital everything
C Next-generation growth: Digital everything Digital tools for different client needs Advisors Institutions Individuals Digital Portfolio Insights Global Cash Portal You Invest Digital Portfolio Insights helps advisors build stronger portfolios Global Cash Portal enables institutions to centrally ma
Slide 170: Integrating human expertise with distinctive digital offerings
C Next-generation growth: Integrating our human expertise with distinctive digital offerings 2013 Expanding our offering… 2018 …across the spectrum UHNW Affluent / HNW Aspiring Affluent Branch Network Upper Mass Mass Underbanked College AWM Expertise Chase Digital Platform 13
Slide 171: Next-generation growth: Global footprint expansion
C Next-generation growth: Global footprint expansion Capturing the full U.S. Wealth Management opportunity1 Growing our Wealth Management Advisors Global Wealth Management Chase Wealth Management +6% CAGR ~6,500 UHNW $4T ~8% share Advisors $10mm+ liquid net worth wallet ~5,500 Advisors HNW $10T ~1%
Slide 172: How we measure against our targets
How we measure against our targets LT AUM Revenue Pretax income Pretax Flows growth growth margin ROE Medium-term targets (+/-) 4% 5% 10% 30% 25%+ 2016 – 2018 2 – 5% (1) – 8% 1 – 10% 26 – 28% 24 – 31% Results range Target met? 15
Slide 173: Agenda
Agenda Page 1 Notes 16 JPMorGan Cuase & Co.
Slide 174: Notes on slides 1-7
Notes on slides 1-7 Slide 1 – AWM delivers superior client outcomes and consistent financial performance 1. Employees identified as top talent by senior executives Slide 2 – Consistent: Reliable growth engine with strong ROE 1. Historical revenue revised as a result of the adoption of the new accoun
Slide 175: Notes on slides 8-9
Notes on slides 8-9 Slide 8 – Consistent: Diversification drives flows 1. Includes Asset & Wealth Management, Chase Wealth Management investments, and new-to-firm Chase Private Client Deposits from 2012-2018; prior to 2012, flows data for Chase Wealth Management investments and new-to-firm Chase Pri
Slide 176: Notes on slides 10-14
Notes on slides 10-14 Slide 10 – Client-centric: Successfully innovating across our platform 1. Source: Morningstar. 5Y return are net of fees for Institutional Share class as of December 31, 2018. 5Y percentile rankings for Institutional Share class as of December 31, 2018. Category Average based o
Slide 177: Commercial Banking – February 26, 2019
FIRM OVERVIEW CORPORATE & IN NT BANK UNITY BANKING ALTH MANAGEMENT D COMMERCIAL BANKING COMMERCIAL BANKING February 26, 2019 JP MORGAN CHASE & CO,
Slide 178: Commercial Banking – a proven business model
Commercial Banking – a proven business model Clients at the center of everything we do Client and community focus Coverage strategically segmented to best serve our clients Local delivery and decision-making, with deep sector expertise Industry-leading, broad-based capabilities Competing fro
Slide 179: Ten year retrospective – consistent investment and disciplined growth
Ten year retrospective – consistent investment and disciplined growth 2008 2018 10-year CAGR Expanded client coverage $9.1 Added 67 locations and Revenue ($B) $4.8 7% ~650 bankers since 20081 Enabled our team Developed training and technology to help $4.2 our people better serve clients Net income (
Slide 180: Executing our organic Middle Market expansion strategy
Executing our organic Middle Market expansion strategy Expansion market revenue ($mm) $1,000 $649 $521 $412 $332 $354 $298 $234 $139 $53 2010 2011 2012 2013 2014 2015 2016 2017 2018 LT Target 2010-18 CAGR Clients (#) 820 1,100 1,360 1,470 1,670 1,970 2,220 2,360 2,750 16% Loans ($B, avg.) $0.9 $2.7
Slide 181: Value in new markets will be realized over time
Value in new markets will be realized over time 39 MSAs added since 20081 27 Top 50 MSAs with Chicago, <10 years MMBSI presence1 Columbus, Dallas, 9 MSAs Houston, Charlotte, 11 MSAs New York City Los Angeles, Kansas City, Miami, 4 MSAs Nashville, San Francisco, Baltimore, Philadelphia, 9 MSAs 6 MSAs
Slide 182: Tremendous opportunity to grow Middle Market client franchise
Tremendous opportunity to grow Middle Market client franchise Middle Market Banking & Specialized Industries market opportunity 116 MMBSI locations1 Prospective MMBSI 38k clients1 Top 100 MSAs in 70 Middle Market footprint U.S. GDP within ~70% MSA presence2 Prospect density4 MMBSI footprint MMBSI ma
Slide 183: Replicating our proven CB model internationally
Replicating our proven CB model internationally Market opportunity Expanding internationally in CCBSI3 $4T Cumulative foreign direct investment in the U.S.1 $146T Annual wholesale cross-border payments value2 Annual wholesale treasury services revenue $231B outside of North America2 Targeting non-U.
Slide 184: Specialized industries model drives superior value and risk management
Specialized industries model drives superior value and risk management ~60% of clients within specific industry coverage Financial Franchise Heavy Higher Agribusiness Apparel Beverage Energy Healthcare Institutions Finance Equipment Education Technology & Media and Multinational Life Government Nonp
Slide 185: Unmatched ability to support our clients as they grow
Unmatched ability to support our clients as they grow Diversify supply sourcing Trade finance Single-use accounts Fund growth Seek liquidity Asset-based lending EPP / ESOP / IPO Syndicated lending Private banking Equipment finance Manage operations 1 Build flagship store Liquidity
Slide 186: Differentiated treasury solutions to drive client value
CB provides differentiated treasury solutions to drive client value Investing across the end-to-end treasury management continuum… New integrated solutions Improved data and analytics Enhanced digital capabilities Advanced fraud protection Cohesive delivery of Better decision making Increased connec
Slide 187: Delivering the best investment bank to CB clients
Delivering the best investment bank to CB clients Commercial Banking gross investment banking revenue1 ($B) JPMC N.A. IB fees $3.0 39% represented by CB clients2 $2.5 $2.4 $2.3 $2.2 $2.0 $1.7 $1.6 $1.4 $1.3 $1.2 $1.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 LT Target 10 1 Represents to
Slide 188: Positioning for continued long-term success in CRE
Positioning for continued long-term success in CRE Market leading position… … driven by intense client focus #1 multifamily lender in the U.S.1 Speed and certainty of execution Real estate banking with top-tier developers, institutional investors and owners Simplicity and digital delivery Financed 2
Slide 189: Consistent risk focus and smart growth across our portfolio
Consistent risk focus and smart growth across our portfolio Average loans by client segment ($B) Rigorous client selection CAGR C&I CRE1 $206 7% $198 $179 Market and industry expertise $106 $102 9% Underwriting built on $90 experience and analytics Through-the-cycle discipline $99 $89 $96 5% Downtur
Slide 190: Maintaining strong risk discipline – C&I
Maintaining strong risk discipline – C&I Portfolio summary Net charge-off performance Diversified across industries and regions 81% of non-investment grade exposure is secured1 Commercial Banking 4 84% of loan facilities are bilateral or JPMC-led2 Peer average 43% of exposure underwritten wi
Slide 191: Maintaining strong risk discipline – CRE
Maintaining strong risk discipline – CRE Portfolio summary Net charge-off performance 71% of loans in Commercial Term Lending Secured by stabilized multifamily properties 4.0% Commercial Banking in supply-constrained markets Peer average2 New originations remain high quality; LTV ratio of 49%,
Slide 192: Driving efficiency while continuing to invest in the franchise
Driving efficiency while continuing to invest in the franchise 37% Illustrative overhead ratio walkforward 35% +/- 2018 Medium-term Target Expense discipline Location strategy Investments Maintaining broad expense Optimizing domestic footprint and Maintaining robust focus and management leveraging o
Slide 193: 2018 results reflect consistent, strong execution
2018 results reflect consistent, strong execution Franchise strength Financial performance 2016 2017 2018 2016 2017 2018 $9.1 1,642 1,766 1,922 $7.5 $8.6 Bankers1 Revenue ($B) 226 $4.2 171 197 $2.7 $3.5 Client calls (000s)2 Net income ($B) 1,232 911 1,062 9 New relationships2 NCO rate (bps) 2 3 $174
Slide 194: Financial targets
Financial targets 2018 2013-2018 Target Middle Market $649mm 17% CAGR $1.0B Execute growth expansion initiatives Investment banking1 $2.5B 8% CAGR $3.0B (long-term revenue targets) International2 $400mm 10% CAGR $1.0B Maintain expense discipline Overhead ratio 37% 39% avg. 35% +/- (medium-term) Opti
Slide 195: Why clients choose us
Why clients choose us Exceptional Coverage designed Long-term team around our clients partner Consultative approach Local coverage Continued capital support Deep client knowledge Industry specialization Substantial investment Unmatched solutions Superior client Safety and capabilities experience and