Jp Morgan Chase & Co. · NYSE:JPM

Jp Morgan Chase & — Q2 2006 Earnings Presentation

16 slides from Jp Morgan Chase &'s earnings presentation, Jul 19, 2006

  1. Slide 1: Financial Results Second Quarter 2006

    J U L Y 1 9, 2 0 0 6 FINANCIAL RESULTS Second Quarter 2006

  2. Slide 2: 2Q06 Managed Results

    2Q06 Managed Results1 ($ in millions) $ O/(U) % O/(U) 2Q06 1Q06 2Q05 1Q06 2Q05 Revenue (FTE)1 $15,718 $9 $2,013 - 15% Credit Costs1 1,054 (226) (463) (18%) (31%) Expense (ex. Merger Cost) 9,150 (427) (1,369) (4%) (13%) Income ex. Merger Costs & Disc. Ops 3,537 466 2,427 15% 219% Merger Costs (after-

  3. Slide 3: 2Q06 Significant Items

    2Q06 Significant Items ($ in millions) Per Share Pre-tax After-tax After-Tax Line of Business Private equity gains $549 $340 $0.10 Corporate Material litigation insurance recoveries 260 161 0.05 Corporate Gain on sale of shares in MasterCard IPO 103 64 0.02 Corporate Merger costs (86) (53) (0.01) Co

  4. Slide 4: Investment Bank

    Investment Bank ($ in millions) „ Net income of $839mm up 37% YoY and down 1% QoQ $ O/(U) „ ROE of 16% on higher allocated capital of 2Q06 1Q06 2Q05 $21bn Revenue $4,184 ($515) $1,424 Investment Bkg. 1,368 198 403 „ Record IB fees of $1.4 billion up 42% YoY driven Fixed Income 2,037 44 609 by record

  5. Slide 5: Retail Financial Services

    Retail Financial Services ($ in millions) „ Net income of $868 million down 11% YoY and 1% $ O/(U) QoQ driven by weaker results in Mortgage Banking 2Q06 1Q06 2Q05 Revenue $3,779 $16 ($20) „ Continued growth in key business drivers; some pressure on rates and margins given competitive Credit Costs 10

  6. Slide 6: Regional Banking

    Regional Banking ($ in millions) „ Average deposits up 7% YoY; EOP balances $ O/(U) down QoQ reflecting seasonality 2Q06 1Q06 2Q05 Revenue $3,063 $23 $111 „ Branch production statistics YoY Credit Costs 70 4 7 „ Checking accounts up 7% Expense 1,746 8 85 „ Credit card sales up 119% „ Mortgage loans

  7. Slide 7: Mortgage Banking & Auto Finance

    Mortgage Banking & Auto Finance Mortgage Banking ($mm) Auto Finance ($mm) $ O/(U) $O/(U) 2Q06 1Q06 2Q05 2Q06 1Q06 2Q05 Revenue $318 ($70) ($186) Revenue $398 $63 $55 Production 202 (17) 58 Credit Costs 30 11 (1) Servicing 116 (53) (244) Expense 184 8 25 Expense 329 5 23 Net Income $111 $26 $17 Net I

  8. Slide 8: Card Services (Managed)

    Card Services (Managed) „ Net income of $875mm up 61% YoY; ROO of 4.05% ($ in millions) $ O/(U) „ Avg outstandings of $137bn up 1% YoY and down 1% 2Q06 1Q06 2Q05 QoQ; EOP outstandings of $139bn up 1% YoY and 4% QoQ Revenue $3,664 ($21) ($222) „ Balances negatively affected by continued high Rev. adj

  9. Slide 9: Commercial Banking

    Commercial Banking ($ in millions) „ Net income of $283mm $O/(U) 2Q06 1Q06 2Q05 „ Loans up 10% YoY driven by growth across Revenue $949 $49 $81 all segments Middle Market 634 11 43 „ Liability balances up 11% YoY Mid-Corporate Banking 161 24 22 Real Estate 114 9 14 „ Revenue up 9% YoY driven by wide

  10. Slide 10: Treasury & Securities Services

    Treasury & Securities Services ($ in millions) „ Beginning in 2Q06, Corporate Trust is $O/(U) excluded from TSS for all periods 2Q06 1Q06 2Q05 Revenue $1,588 $103 $171 „ Record net income of $316mm up 68% YoY Treasury Services 702 9 (2) and 21% QoQ „ Pre-tax margin of 32% Worldwide Securities Svcs 8

  11. Slide 11: Asset & Wealth Management

    Asset & Wealth Management ($ in millions) „ Record net income of $343mm up 21% YoY $O/(U) „ Pre-tax margin of 34% 2Q06 1Q06 2Q05 Revenue $1,620 $36 $277 „ Assets under management up 15% YoY, including Highbridge AUM of $11 billion up Credit Costs (7) - 13 52% YoY Expense 1,081 (17) 164 „ Record reve

  12. Slide 12: Corporate

    Corporate Total Corporate ($mm) Treasury ($mm) $ O/(U) $ O /(U ) 2Q06 1Q06 2Q05 2Q 06 1Q 06 2Q 05 Net Income $16 $382 $1,783 N et Income ($347) ($75) ($23) 1 Net Income ex. Disc. Ops (40) 380 1,784 N et Interest Incom e (104) 177 369 Private Equity 293 190 171 Securities Gains/(Losses) (492) (334) (

  13. Slide 13: Capital Strength

    Capital Strength 2Q06 1Q06 2Q05 Capital/Balance Sheet ($B) Tier 1 capital1 $75.0 $73.1 $69.8 Risk weighted assets1 $884.2 $858.1 $850.2 Tier 1 capital ratio1 8.5% 8.5% 8.2% 1 Total capital ratio 12.0% 12.1% 11.3% Leverage ratio1 5.8% 6.1% 6.2% Common shareholders’ equity less goodwill $67.2 $64.4 $6

  14. Slide 14: 2Q06 Summary Assessment

    2Q06 Summary Assessment „ Record IB fees and solid markets results „ Very low wholesale and consumer credit costs „ Card results benefit from low bankruptcy losses „ Record revenue and earnings in Asset & Wealth Management and Treasury & Securities Services on strong underlying growth „ Retail Finan

  15. Slide 15: Comments on Outlook

    Comments on Outlook „ Very favorable credit environment -- not expected to continue „ Wholesale and consumer net charge-off rates will eventually return to normalized levels „ Card: Given current economic conditions (i.e., low level of unemployment) and impacts of new minimum payment rules and chang

  16. Slide 16: Disclaimer

    Disclaimer This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. Actu

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