Jp Morgan Chase & Co. · NYSE:JPM
Jp Morgan Chase & — Investor Day (February 2019)
46 slides from Jp Morgan Chase &'s investor day presentation, Feb 26, 2019
Slide 1: Investor Day 2019
Investor Day 2019 | February 2019 February 26, 2019
Slide 2: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 3: 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 $32.9 $33.3 20% ■ Revenue1 35 18% 20% 16% 15% 15% 30 14% 15% ◆ Heritage TSS ROE 25 14% ▲ Heritage I
Slide 4: Expenses increased due to higher revenues and additional investments
Expenses increased due to higher revenues and additional investments 2017 to 2018 ($B)1 $0.4 $0.3 $0.1 $20.7 $0.5 $19.4 2017 Revenue- Tech Non-tech Other 2018 related growth investments investments O/H ratio 56% 57% 1 Expense adjusted for legal expense 2
Slide 5: ROE increased from 14.5% in 2017 to 15.9% in 2018
ROE increased from 14.5% in 2017 to 15.9% in 2018 0.8% 15.9% (1.7)% (0.1)% 14.5% 1.3% 1.1% 2017 2017 Actual Revenue Rates Expenses Credit Cost Tax 2018 2018 Actual & Other 3
Slide 6: CIB gained market share faster than peers, strengthening our leadership across businesses
CIB gained market share faster than peers, strengthening our leadership across businesses Gaining market share at a faster rate than any of our peers Strengthening global leadership positions across businesses Global CIB Market Share1,2 No. of businesses where JPM is ranked3,4 ■ #1 3 ■ #2-3 1■ #4-6
Slide 7: Global Investment Banking grew share across all regions
Global Investment Banking (GIB) grew share across all regions resulting in 8.7% market share in 2018 (highest since 2009) GIB Wallet ■ Industry wallet ($B) ◆ Market share M&A ■ Industry wallet ($B) ◆ Market share 8.4% 8.3% 8.4% 8.9% 8.0% 8.7% 8.0% 7.8% 7.9% 8.1% $26 $28 $24 $25 $22 2014 2015 2016 20
Slide 8: Markets business continued to increase market share across products while delivering strong returns
Markets business continued to increase market share across products while delivering strong returns Equities1 Global Markets market share (%)1,2,3 ■ Industry wallet ($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 $62 Peer
Slide 9: CIB Treasury Services business has grown significantly since 2016
CIB Treasury Services business has grown significantly since 2016 through a combination of rising rates and organic growth Strong growth in CIB TS revenue and operating leverage Strong growth in deposits… ■ Revenue ($B) CAGR ■ Operating Deposits CAGR ■ Expenses 2016-18 ■ Non-Operating Deposits 2016-
Slide 10: Securities Services continues to transform itself; record financial results
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 11: We continue to 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 12: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 13: 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 14: Our Equities franchise has steadily gained market share across our key products
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 15: Sustained investments and focus in Cash Equities has spurred substantial 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 16: Market share gains in all regions 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 ◆ Total Pr
Slide 17: Equities franchise will continue to pursue 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 18: Electronification has been driven by two types of factors
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 Electronic
Slide 19: We are investing in technology to provide clients with 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 20: Pace of electronification has varied across different 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 21: We remain highly committed to 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 22: Going forward, we are 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 23: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 24: Wholesale Payments recorded $11B revenue and grew by 28% over the last two years
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 25: We bring the entire suite of Wholesale Payments products across our clients
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 26: Our strong performance in Firmwide Treasury Services has made us a market leader
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 27: We are creating a unique value proposition through our 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 28: We continue to make progress on delivering global, scalable platforms
We continue to make progress on delivering global, scalable platforms Key Milestones Looking Ahead Core Payments Live today in several countries PLATFORMS Reduce costs by decommissioning legacy platforms Featuring a number of state-of-the-art configurable Significant improvement in speed to
Slide 29: Interbank Information Network and JPM Coin: examples of Wholesale Payments innovation
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 30: Product innovation delivered over the past months
Product innovation delivered over the past 12 months Key Milestones Looking Ahead Global 100+ countries 120+ countries PLATFORMS MassPay ~50 currencies 70+ currencies Virtual Account Live in all regions by March 2019 Complete roll-out across all major markets Management ~40 currencies
Slide 31: U.S. Real-Time Payments: product innovation at scale
U.S. Real-Time Payments: product innovation at scale 1 Announcement and prioritization of use cases 2 Use case development and Roll-out 3 Integration 4 Acceleration Live in November 2017 Roll-out with pilot clients and Fully integrated with Chase.com – Full roll-out to Chase enterprise provi
Slide 32: eCommerce platform: Example of our 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 33: Our strategic focus is to be the leader in 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 34: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 35: Expense walkforward (adjusted)
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 36: ROE Walk: 2018 Actuals – Medium-term target
ROE Walk: 2018 Actuals – Medium-term target (2.2)% ~(0.5)% ~3% ~16% 15.9% Revenue ~$40B Overhead Ratio 54%+/- Capital $80B 2018 Net growth Higher capital Other Medium-term 31
Slide 37: We remain focused on day-to-day discipline, optimizing our model and 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 future model discipline Continuous focus on client Closing addressable gaps1 in Investing in new and emerging tech e
Slide 38: Agenda
Agenda Page 1 CIB overview 1 2 Markets 10 3 Wholesale Payments 20 4 Closing remarks 30 5 Notes 33
Slide 39: Notes on slide 1 – We delivered strong results and had a 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 40: Notes on slide 4 – 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 41: Notes on slide 6 – Markets business continued to increase 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 42: Notes on slide 11 – Our Equities franchise has steadily gained 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 43: Notes on slide 17 – Pace of electronification has varied across FICC products
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 44: Notes on slide 18 – We remain highly committed to strengthening our 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 45: Notes on slide 22 – Our strong performance in 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 46: Notes on slide 32 – We remain focused on day-to-day discipline
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