JPMorgan Chase & Co. · NYSE:JPM
JPMorgan Chase & — Investor Day (February 2017)
200 slides from JPMorgan Chase &'s investor day presentation, Feb 28, 2017
Slide 1: Firm Overview
F I R M O V E R V I E W Marianne Lake, Chief Financial Officer February 28, 2017
Slide 2: Strong fundamentals and execution
Strong fundamentals and execution JPMorgan Chase overview F I R M O V E R V I E W 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 li
Slide 3: 2016 results – strong financial performance on an absolute basis
2016 results – strong financial performance on an absolute basis… JPMorgan Chase overview F I R M O V E R V I E W Revenue1 Adjusted expense2 Net income CET15 Capital return Diversification supporting revenue, despite low rates and macro volatility Net interest income of $47B and noninterest reve
Slide 4: … and on a relative basis – JPM continues to be a leader
… and on a relative basis – JPM continues to be a leader JPMorgan Chase overview F I R M O V E R V I E W FY2016 Overhead ratio1,2 FY2016 Managed revenue1 ($B) $99 $90 $85 $71 $31 $35 JPM WFC BAC C GS MS 56% 59% 65% 58% 66% 74% JPM WFC BAC C GS MS 3% (3)% 15% (13)% 34% 1% JPM WFC BAC C GS MS FY2016 E
Slide 5: Sustained tangible book value growth
Sustained tangible book value growth JPMorgan Chase overview F I R M O V E R V I E W TBVPS and dividends are building blocks of value creation $18.88 $21.96 $22.52 $27.09 $30.12 $33.62 $38.68 $40.72 $44.60 $48.13 $51.44 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Tangible book value per s
Slide 6: Our operating model is centered around our clients
Our operating model is centered around our clients JPMorgan Chase overview F I R M O V E R V I E W Operating model Client segmentation ~50% of U.S. households >80% of Fortune 500 companies Cannot be replicated – complete, global, diversified and at scale – built over decades Wholesale Individuals Di
Slide 7: Disciplined resource allocation and granular performance measurement
Disciplined resource allocation and granular performance measurement JPMorgan Chase overview F I R M O V E R V I E W 1 Net income applicable to common equity (“NIAC”) 2 Excludes Corporate 3 Annualized asset growth from 4Q14-4Q16 with the exception of Consumer Banking which is deposit growth (30%) (2
Slide 8: Benefits of a diversified platform on returns and in stress
F I R M O V E R V I E W Benefits of a diversified platform on returns and in stress JPMorgan Chase overview 1 Source: Peer disclosures in SEC filings and SNL Financial; Based on fully phased-in risk-weighted assets (“RWA”), where available, subject to Collins Floor 2 Source: FRB 2016 DFAST disclosur
Slide 9: Agenda
Agenda F I R M O V E R V I E W Maximizing long-term shareholder value 3 Leading to 55-75% Net payout ratio ~15% ROTCE 55%+/- Overhead ratio 11%+ CET1 ratio Capital and liquidity Operating leverage and financial simulation Building exceptional client franchises 1 Operating with fortress principles 2
Slide 10: Leading client franchises
Leading client franchises Building exceptional client franchises F I R M O V E R V I E W 1 2006 2015 2016 Deposits market share1 3.6% 7.9% 8.3% # of top 50 Chase markets where we are #1 ( top 3) 11 (25) 12 (40) 14 (38)14 (38) Average deposits growth rate 8% 9% 10% Active mobile customers growth rate
Slide 11: Proven best-in-class long-term performance
Proven best-in-class long-term performance Building exceptional client franchises F I R M O V E R V I E W 1 Note: Numbers may not sum due to rounding. For footnoted information, refer to slide 40 4% 7% 4% 8% 1% 5% 10% 6% 6% 4% 4% 2% JPM WFC BAC USB C PNC Total EOP Retail 9% 8% 6% 5% 5% 3% JPM WFC PN
Slide 12: Proven best-in-class long-term performance (cont'd)
Proven best-in-class long-term performance (cont’d) Building exceptional client franchises F I R M O V E R V I E W 1 J.D. Power customer satisfaction score: 2011–20161 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 Chase Industry Average Big Banks Regional Banks Midsize Banks 2010 2011 2012
Slide 13: Agenda
Agenda F I R M O V E R V I E W Maximizing long-term shareholder value 3 Leading to 55-75% Net payout ratio ~15% ROTCE 55%+/- Overhead ratio 11%+ CET1 ratio Capital and liquidity Operating leverage and financial simulation Building exceptional client franchises 1 Operating with fortress principles 2
Slide 14: Fortress balance sheet
Fortress balance sheet Operating with fortress principles F I R M O V E R V I E W 2 Note: Numbers may not sum due to rounding. For footnoted information, refer to slide 42 Continue to grow the balance sheet on strong loan growth funded by deposits Expect 2017 YoY average core loan growth of ~10% EOP
Slide 15: Credit – net charge-offs
Credit – net charge-offs Operating with fortress principles F I R M O V E R V I E W 2 NCO rates at cyclical lows ($B) Historical and expected Card NCO rates and average loans by acquisition vintage Commentary Expect 2017 and medium-term NCO rates to remain relatively flat across businesses with th
Slide 16: Credit – reserves
Credit – reserves Operating with fortress principles F I R M O V E R V I E W 2 2016 Credit reserves ($B) Commentary Firmwide $14.9 Consumer $9.3 Energy2 $1.5 Wholesale ex-energy2 $4.1 PCI1 $2.3 Consumer ex-PCI $6.9 PCI1 Potential for further modest reserve release Energy2 Stable with no broa
Slide 17: Credit – Commercial Real Estate and Auto
Credit – Commercial Real Estate (“CRE”) and Auto Operating with fortress principles 2 F I R M O V E R V I E W F I R M O V E R V I E W Auto portfolio average loan balances4 ($B) Commentary Business focus on profit over growth Leases – only offered for our manufacturing partners Risk sharing arr
Slide 18: Agenda
Agenda F I R M O V E R V I E W Maximizing long-term shareholder value 3 Leading to 55-75% Net payout ratio ~15% ROTCE 55%+/- Overhead ratio 11%+ CET1 ratio Capital and liquidity Operating leverage and financial simulation Building exceptional client franchises 1 Operating with fortress principles 2
Slide 19: Continue to operate from a position of strength
Continue to operate from a position of strength Maximizing long-term shareholder value 3 F I R M O V E R V I E W 2016 10.2% 2015 CET11,2 +60bps 12.2% 11.6% Firm SLR2 6.5% 6.5% Total assets $2.5T $2.4T RWA1,2 Std. / Adv. $1.5T $1.5T GSIB3 3.5% 3.5% Net payout 65% 48% +17% Dividends per share $1.
Slide 20: Capital allocation
Capital allocation Maximizing long-term shareholder value – capital 3 F I R M O V E R V I E W Capital allocations and methodology enhanced to further reflect multiple constraints of the Firm Note: For footnoted information, refer to slide 45 Capital allocation ($B) Overview Moved to multi-variable
Slide 21: Capital management framework
Capital management framework Maximizing long-term shareholder value – capital 3 F I R M O V E R V I E W In 2016, enhanced framework to include more granular and dynamic capital triggers Proposed minimum baseline requirements – only a speech at this stage No specific clarification if there woul
Slide 22: Medium-term capital and payout simulation
Medium-term capital and payout simulation Maximizing long-term shareholder value – capital F I R M O V E R V I E W 3 ¹ Source: FRB CCAR disclosures; medium-term payout ratio is based on analyst estimates 2 Basel III Advanced Fully Phased-In. Represents the capital rules the Firm will be subject to c
Slide 23: Significant resources to address liquidity needs
F I R M O V E R V I E W Significant resources to address liquidity needs Maximizing long-term shareholder value – liquidity 3 Liquidity Significant excess liquidity primarily driven by Resolution ~$50B increase in liquidity year-over-year Firm addressed deficiencies identified by the regulatory
Slide 24: Banking industry resilience
Banking industry resilience Maximizing long-term shareholder value – loss absorbing capacity 3 F I R M O V E R V I E W Note: For footnoted information, refer to slide 47 $481 $2,809 $1,379 $1,153 Cash Short-term liabilities Cash Short-term liabilities $85 $393 $448 $252 Cash Short-term liabilities C
Slide 25: Opportunity for evolution of the regulatory environment
F I R M O V E R V I E W Opportunity for evolution of the regulatory environment Maximizing long-term shareholder value – adapting to the environment 3 Coherence of rules – coordinated across regulatory agencies Review regulatory landscape in context of cost-benefit and economic growth Simplified, mo
Slide 26: Agenda
Agenda F I R M O V E R V I E W Maximizing long-term shareholder value 3 Leading to 55-75% Net payout ratio ~15% ROTCE 55%+/- Overhead ratio 11%+ CET1 ratio Capital and liquidity Operating leverage and financial simulation Building exceptional client franchises 1 Operating with fortress principles 2
Slide 27: Deposit re-pricing: current cycle vs. 2004 cycle
F I R M O V E R V I E W Deposit re-pricing: current cycle vs. 2004 cycle Maximizing long-term shareholder value 3 1 2004 cycle dates: 06/04-06/06; quarterly results shown above. Excludes ECR impact 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 0.0% 1.0% 2.0% 3.0% 4.0% Fed Funds Target Ra te s P aid D
Slide 28: NII – well positioned for rising rates
NII – well positioned for rising rates Maximizing long-term shareholder value – operating leverage F I R M O V E R V I E W 3 $0 $2 $4 $6 $8 $10 $12 2016 2017 2018 2019 Inc re me nta l N II Inc re me nta l N II 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 2016 2017 2018 2019 Spot IOER paths NII simulation
Slide 29: Noninterest revenue growth over time
F I R M O V E R V I E W Noninterest revenue growth over time Maximizing long-term shareholder value – operating leverage 3 Note: For footnoted information, refer to slide 48 ~3% annual NIR growth since 2011 excluding headwinds NIR walk1 ($B) >($6) 2,3 Includes impact from Durbin ($1)B and Reg E ($
Slide 30: Adjusted expense – creating capacity to self-fund investments and growth
F I R M O V E R V I E W Note: For footnoted information, refer to slide 49 Adjusted expense – creating capacity to self-fund investments and growth Maximizing long-term shareholder value – operating leverage 3 $58.4 2014 CCB & CIB efficiencies Investments & growth Regulatory- related & other 2017 $5
Slide 31: Earnings simulation
Earnings simulation Maximizing long-term shareholder value F I R M O V E R V I E W Simulation assumptions $7B after-tax NII uplift including impact of rates and growth High single digit core loan growth Assumes Markets and Mortgage revenue flat NIR CAGR of ~4% excluding Markets and Mortgage
Slide 32: Conclusion
Conclusion F I R M O V E R V I E W 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 33: Agenda
Page Agenda F I R M O V E R V I E W Appendix – Fixed Income 32 Notes 37
Slide 34: Overview of funding sources
Overview of funding sources Managing to an optimized funding mix A P P E N D I X – F I X E D I N C O M E $254 $247 $280 $198 $137 $618 $757 2016 $248 $248 $263 $186 $127 $558 $722 2015 Liabilities and stockholders’ equity at 12/31/16 ($B) Capital markets liabilities: $527 Total Deposits $1,280 $2,35
Slide 35: Holding Company unsecured long-term debt
JPMorgan Chase & Co. (Holding Company) unsecured long-term debt Optimizing portfolio with efficient callable structures A P P E N D I X – F I X E D I N C O M E Holding Company unsecured long-term debt outstanding1 ($B) $151 $162 $164 $26 $21 $20 2014 2015 2016 Senior debt Sub debt $177 $183 $184 2 H
Slide 36: Holding Company unsecured benchmark long-term debt and preferred equity
Holding Company unsecured benchmark long-term debt1 and preferred equity Diversified portfolio across products, currencies & tenors A P P E N D I X – F I X E D I N C O M E Issuance by security type 2014-2016 ($B) Unsecured debt issued by currency 2014-2016 ($B) $27 $28 $27 $5 $3 $1 $9 $6 $41 $37 $28
Slide 37: Composition and calibration of TLAC
Composition and calibration of TLAC Modest and manageable external long-term debt shortfall A P P E N D I X – F I X E D I N C O M E Commentary 3 Holding Company – Eligible long-term debt at 12/31/2016 ($B) $20 $136 $164 $146 $15 $23 $10 2016 – 10K disclosure Structured notes, TruPs & other Debt with
Slide 38: Current capital position
Current capital position A P P E N D I X – F I X E D I N C O M E Basel III advanced fully phased-in capital ratios and components at 12/31/16 ($B) $254 $228 $182 $207 $227 $26 $45 $26 $15 $4 Total stockholders' equity Common stockholders' equity CET1 capital¹ Total tier 1 capital¹ Total capital¹ Pfd
Slide 39: Agenda
Page Agenda F I R M O V E R V I E W Notes 37 Appendix – Fixed Income 32
Slide 40: Notes on non-GAAP financial measures and key performance measures
Notes on non-GAAP financial measures and key performance 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, including the overhead ratio and the results of the lines of business, on a “man
Slide 41: Notes on slide 3
Notes on slide 3: … on a relative basis – JPM continues to be a leader N O T E S 1. See note 1 on slide 37 2. Managed overhead ratio = total noninterest expense / managed revenue 3. Citigroup (“C”) adjusted for 1 for 10 reverse stock split in 2011 4. ROTCE for firms based on company filings with the
Slide 42: Notes on slide 9: Leading client franchises
Notes on slide 9: Leading client franchises N O T E S 1. FDIC 2016 Summary of Deposits survey per SNL Financial. Excludes all branches with $500mm+ in deposits within the last two years (excluded branches are assumed to include a significant level of commercial deposits or are headquarter branches f
Slide 43: Notes on slide 10
Notes on slide 10: Proven best-in-class long-term performance N O T E S Source: Company filings and SNL Financial, unless otherwise noted 1. See note 6 on slide 37 2. Core loans calculated as total end-of-period (“EOP”) loans less total EOP noncore loans; total loan CAGR for USB and PNC; “noncore” d
Slide 44: Notes on slide 11
Notes on slide 11: Proven best-in-class long-term performance (cont’d) N O T E S 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 company filings and internal JP
Slide 45: Notes on slide 13: Fortress balance sheet
Notes on slide 13: Fortress balance sheet N O T E S 1. Includes cash and due from banks and deposits with banks 2. Includes debt, derivative receivables and equity trading assets 3. Net of allowance for loan losses 4. Includes accrued interest and accounts receivable, premises and equipment, mortgag
Slide 46: Notes on slide 16
Notes on slide 16: Credit – Commercial Real Estate (“CRE”) and Auto N O T E S 1. Excludes available-for-sale and held-to-maturity commercial mortgage-backed securities positions, Securitized Products Group (“SPG”) trading assets, and exposure secured by real estate to clients outside of the real est
Slide 47: Notes on slide 18
N O T E S 1. Reflects Basel III Advanced Fully Phased-In measure 2. See note 5 on slide 37 3. Global Systemically Important Banks (“GSIB”) 4. External Notes on slide 18: Continue to operate from a position of strength 44
Slide 48: Notes on slide 19: Capital allocation
Notes on slide 19: Capital allocation N O T E S 1. 2017 Allocations changed from common equity to tangible common equity, resulting in LOB equity being more in line with peers 2. Primarily reflects equity held for property, premises and equipment (“PP&E”) and retained operational risk as well as una
Slide 49: Notes on slide 20: Capital management framework
Notes on slide 20: Capital management framework N O T E S 1. Represents an illustration of internally-calculated requirements based on confidential, non-public information 2. Stress based on FRB 2015 and 2016 CCAR results and baseline distributions of 75% of analyst estimates 3. JPMorgan Chase estim
Slide 50: Notes on slide 23: Banking industry resilience
Notes on slide 23: Banking industry resilience N O T E S Source: FR-Y9C, FR-Y9LP, company filings, FRB 2016 DFAST results, SNL Financial 1. All Other includes loan loss reserve, preferred equity and long-term debt 2. JPMorgan Chase includes Washington Mutual and Bear Stearns 3. CCAR pretax losses re
Slide 51: Notes on slide 28
Notes on slide 28: Noninterest revenue growth over time N O T E S 1. See note 1 on slide 37 2. Excludes noninterest revenue (“NIR”) in the Private Equity (“PE”) business ($1B in 2011 and $0.2B in 2016) 3. 2011 has been revised to reflect the adoption of new accounting guidance for investments in aff
Slide 52: Notes on slide 29
Notes on slide 29: Adjusted expense – creating capacity to self-fund investments and growth N O T E S 1. See note 2 on slide 37 2. Includes sales support and other front office support 3. Includes marketing and technology spend, cybersecurity spend, auto lease depreciation and growth initiatives 4.
Slide 53: Notes on slide 32: Overview of funding sources
Notes on slide 32: Overview of funding sources N O T E S 1. Accounts payable and other liabilities include federal funds purchased, long-term securities loaned and structured repurchase agreements; and client-driven loan securitizations which are included in “beneficial interests issued by consolida
Slide 54: Notes on slide 33
Notes on slide 33: JPMorgan Chase & Co. (Holding Company) unsecured long- term debt N O T E S 1. Long-term debt (“LTD”) maturing in <1 year is not TLAC eligible; 50% of the LTD that matures in 1-2 years is TLAC eligible 2. Includes trust preferred securities (“TruPs”) 3. Non-TLAC eligible debt is ap
Slide 55: Commercial Banking
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 February 28, 2017
Slide 56: Commercial Banking – a proven business model
Draft Commercial Banking – a proven business model Clients at the center of everything we do Coverage strategically segmented and focused to best serve client needs Local delivery and decision making, with deep industry expertise Client and community focus Rigorous client selection with a lo
Slide 57: Agenda
Draft Page Agenda C O M M E R C I A L B A N K I N G Franchise strength 2 Disciplined long-term growth 10 Business innovation 14 Financial targets 18 Notes 21
Slide 58: Clients are at the center of everything we do
Draft Clients are at the center of everything we do Deliver client value Experienced bankers Segmented Client service Local delivery Unmatched capabilities JPMC client team approach Well-defined segmentation Local teams International expertise Industry specialization Coverage aligned to clie
Slide 59: Commercial Banking client segmentation
Draft Commercial Banking Business Banking <$20mm revenue Middle Market Banking & Specialized Industries $20mm-$500mm revenue Corporate Client Banking & Specialized Industries $500mm-$2B revenue Corporate & Investment Banking >$2B revenue Middle Market Banking (MMBSI) $20mm-$500mm revenue Corporate C
Slide 60: Leveraging the JPMorgan Chase platform creates a real competitive advantage
Draft Leveraging the JPMorgan Chase platform creates a real competitive advantage Unmatched value proposition for CB clients 1 2016 Greenwich Associates Digital Banking Benchmarking Study 2 Does not include fees from Fixed Income and Equity Markets products which is included in Commercial Banking gr
Slide 61: Uniquely positioned to serve clients' evolving needs
Draft Uniquely positioned to serve clients’ evolving needs F R A N C H I S E S T R E N G T H Illustrative case study – C&I client Treasury services Lending Capital markets and advisory Entrepreneur-run Handful of stores Family-owned Hundreds of suppliers Publicly-traded Multicurrency exp
Slide 62: Executed our proven strategy in 2016
Draft Executed our proven strategy in 2016 F R A N C H I S E S T R E N G T H Franchise strength Financial performance 2014 2015 2016 2014 2015 2016 Bankers1 + 7% YoY Client calls (000s)2 + 13% YoY NCOs (bps) 2bps excluding O&G Overhead ratio Improved 3% YoY 39% 42% 39% ROE5 + 1% YoY 18% 15% 16% Net
Slide 63: Disciplined C&I loan growth
Draft 0.0% 1.0% 2.0% 3.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Disciplined C&I loan growth F R A N C H I S E S T R E N G T H $74 $78 $85 $92 2013 2014 2015 2016 C&I loans outstanding ($B, EOP)1 MMBSI loans, up 7% YoY, with strong results across regions, particularly expansion markets, up 1
Slide 64: Highly-targeted CRE loan growth
Draft Highly-targeted CRE loan growth F R A N C H I S E S T R E N G T H $63 $71 $83 $97 2013 2014 2015 2016 CRE loans outstanding ($B, EOP)1 Strong originations across CRE, while maintaining strict underwriting criteria Improved market share across CTL Increased term loan activity in REB Con
Slide 65: Maintaining strict discipline in CRE
Draft 74% 85% 11% 8% 7% 8% 4% 4% Portfolio by asset class Portfolio by purpose Multifamily Office Retail Industrial Other Maintaining strict discipline in CRE F R A N C H I S E S T R E N G T H CTL Large, densely-populated, supply- constrained markets Class B / C properties with rents below marke
Slide 66: Agenda
Draft Page Agenda C O M M E R C I A L B A N K I N G Disciplined long-term growth 10 Franchise strength 2 Business innovation 14 Financial targets 18 Notes 21
Slide 67: Patient, disciplined Middle Market franchise expansion
Draft Patient, disciplined Middle Market franchise expansion 2010 2011 2012 2013 2014 2015 2016 Long-term target Total expansion market revenue ($mm) $1,000 $53 $232 $297 $328 Clients (#) Loans EOP ($B) Deposits ($B) 820 1,100 1,360 1,470 1,670 1,970 2,220 18% $1.6 $4.4 $6.8 $8.2 $8.8 $10.7 $12.6 41
Slide 68: California presents a major market opportunity
Draft D I S C I P L I N E D L O N G - T E R M G R O W T H California presents a major market opportunity 2010 2016 2010 2016 2010 2016 Clients Loans (EOP) Deposits (avg.) MMBSI entered California following the WaMu acquisition in 2008; now has 13 offices California represents the 6th largest glo
Slide 69: Industry expertise remains a strong differentiator to C&I clients
Draft Industry expertise remains a strong differentiator to C&I clients D I S C I P L I N E D L O N G - T E R M G R O W T H Targeted industries Specialized capabilities Industry-specific products and content Custom client solutions Sector-specific advice and content to support clients Risk manag
Slide 70: Continued success in delivering investment banking solutions to CB clients
Draft Continued success in delivering investment banking solutions to CB clients Commercial Banking gross investment banking revenue1 ($B) D I S C I P L I N E D L O N G - T E R M G R O W T H 2010 2011 2012 2013 2014 2015 2016 Long-term target $1.3 $1.4 $1.6 $1.7 $3.0 $2.0 $2.3 $2.2 CB clients repres
Slide 71: Agenda
Draft Page Agenda C O M M E R C I A L B A N K I N G Business innovation 14 Disciplined long-term growth 10 Franchise strength 2 Financial targets 18 Notes 21
Slide 72: Investing in technology to drive process and product innovation
Draft Treasury Services Investing in technology to drive transformational process and product innovation B U S I N E S S I N N O V A T I O N Broad focus on innovation Client solutions Ease of doing business Data and analytics Business foundation Credit Digital Select CB initiatives Leading digital p
Slide 73: Expanding wholesale payments capabilities
Draft 120+ Currencies to execute payments #1 USD clearing house6 $5T Average daily value of payments B U S I N E S S I N N O V A T I O N Expanding wholesale payments capabilities Large wholesale payments market... …with significant client pain-points J.P. Morgan is a market leader… …and is leveragin
Slide 74: Improving client experience through enhanced digital delivery
Draft Improving client experience through enhanced digital delivery B U S I N E S S I N N O V A T I O N Developing end-to-end digital platform to deliver robust capabilities Aligned, integrated product offerings Comprehensive payment solutions Simple user experience, navigation Universal mob
Slide 75: Investing to expand CTL's competitive advantage
Draft Investing to expand CTL’s competitive advantage New loan origination platform will transform CTL’s lending process B U S I N E S S I N N O V A T I O N Reduce already leading loan closing times Improve transparency Generate incremental operating leverage Improve client experience Furt
Slide 76: Agenda
Draft Page Agenda C O M M E R C I A L B A N K I N G Financial targets 18 Disciplined long-term growth 10 Business innovation 14 Franchise strength 2 Notes 21
Slide 77: Well-positioned to capitalize on macro trends
Draft Well-positioned to capitalize on macro trends F I N A N C I A L T A R G E T S Opportunities CB positioning Significant CRE demand $1T+ in near-term CRE maturities2 Strong multifamily fundamentals Differentiated CRE platform with proven ability to execute Strategic geographic focus Risi
Slide 78: Continue to make strong progress toward achieving our targets
Draft Continue to make strong progress toward achieving our targets Financial targets Execute growth initiatives (long-term revenue targets) Investment banking1 International2 Middle Market expansion Optimize returns (medium-term) Maintain expense & credit discipline (medium-term) Overhead ratio Net
Slide 79: Our strategic priorities are focused on delivering incremental value to our clients
Draft Our strategic priorities are focused on delivering incremental value to our clients Execute disciplined long-term growth strategy Strengthen our business foundation to better serve our clients Maintain a control environment that is effective and efficient Drive business innovation to improve c
Slide 80: Agenda
Draft Page Agenda C O M M E R C I A L B A N K I N G Notes 21 Disciplined long-term growth 10 Business innovation 14 Financial targets 18 Franchise strength 2
Slide 81: Notes
Draft Notes Note: Numbers herein may not sum due to rounding; prior years’ financials have been revised to conform to current presentation 1. Based on total count of revenue-producing employees 2. Excludes CTL 3. Deposits herein represent average client deposits and other third-party liabilities 4.
Slide 82: Notes (cont'd)
Draft N O T E S Notes (cont’d) 1. GDP used as proxy for global economy; World Bank and Bureau of Economic Analysis as of 2015 2. Top 50 Metropolitan Statistical Areas ranked by population according to 2015 U.S. Census Bureau estimates 3. Represents total firm revenue from investment banking products
Slide 83: Forward-looking statements
Draft Forward-looking statements N O T E S 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 sign
Slide 84: 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 28, 2017
Slide 85: Agenda
Agenda Page Financial performance 1 2016 Business updates 5 Financial targets 19 C O R P O R A T E & I N V E S T M E N T B A N K
Slide 86: Summary update from previously committed priorities
Summary update from previously committed priorities Retain global and complete business model while simplifying and optimizing the business mix across multiple constraints Exited non-core businesses Grew revenue while retaining balance sheet discipline Preserved complete offering, leveraging b
Slide 87: In 2016, we delivered strong results
In 2016, we delivered strong results F I N A N C I A L P E R F O R M A N C E Net revenues and income1,2 ($B) 1 FY12 includes revisions related to the adoption of new accounting guidance for investments in affordable housing projects 2 Excludes funding valuation adjustments (FVA)/debit valuation adju
Slide 88: Consistent discipline driving overall expenses down
Consistent discipline driving overall expenses down while enabling reinvestment for growth and controls Adjusted expense ($B)1 Key drivers for 2014–2016 1 Adjusted for legal expense 2 Excludes business simplification 3 Includes FDIC/FICO assessment charges, UK Bank Levy and other regulatory assessme
Slide 89: ROE walk forward
ROE walk forward F I N A N C I A L P E R F O R M A N C E CIB normalized ROE walk – FY2015 to FY2016 12.2% 16% 1.8% 1.6% 0.2% 0.7% (0.5%) 14.0% 2015 Revenue Rates Expenses Higher capital requirement 2016 +200 bps Revenue growth - 40 bps Run-off portfolio Legal expense 4
Slide 90: Agenda
Agenda Page 2016 Business updates 5 Financial performance 1 Financial targets 19 C O R P O R A T E & I N V E S T M E N T B A N K
Slide 91: Continuing to invest in our TS franchise
Continuing to invest in our TS franchise to capture a greater share of the global cash management wallet 2 0 1 6 B U S I N E S S U P D A T E S Treasury Services Make it easy to do business with TS Automate and digitize account opening Transparent and fully customizable view of client relations
Slide 92: Delivering on value proposition by leveraging the power of the CIB
Delivering on value proposition by leveraging the power of the CIB and transforming our client offering through technology investment 2 0 1 6 B U S I N E S S U P D A T E S Highest client satisfaction in recent years Commitment to providing clients access to high quality staff in their own time z
Slide 93: Significant progress in M&A and ECM while preserving DCM position
$20 $18 $22 $24 $24 6.4% 7.5% 8.0% 8.4% 8.6% 2012 2013 2014 2015 2016 M&A industry wallet ($B) and JPM share (%) trend ECM industry wallet ($B) and JPM share (%) trend1 Industry wallet JPM share Global Investment Banking Significant progress in M&A and ECM while preserving historically strong positi
Slide 94: Our client-centric Markets franchise is scalable and well positioned
Our client-centric Markets franchise is scalable and well positioned to capture future opportunities 2 0 1 6 B U S I N E S S U P D A T E S Markets Our position and performance allow us to invest for the future Core strategy Operating principles Strong profitability Invest for the future Scale Comp
Slide 95: We have captured significant market share across products
We have captured significant market share across products while overall industry revenue pool declined 2 0 1 6 B U S I N E S S U P D A T E S FICC Equities & Prime Global revenue pool ($B) and market share (%) $157 $127 $148 $126 $116 $107 $114 8.6% 10.2% 9.2% 9.9% 9.3% 10.3% 12.0% 2010 2011 2012 201
Slide 96: We improved our leadership positions in Markets
We improved our leadership positions in Markets in the last 5 years, but there is still room for growth 2 0 1 6 B U S I N E S S U P D A T E S Markets Evolution of leadership positions Grown number of top 3 positions across 31 product and geographic categories Continuous assessment of areas for i
Slide 97: Sustained market share growth in Equities and Prime
2014 2016 2014 2016 Low Touch High Touch Cash Equities revenue Equity Derivatives revenue 2014 2016 Cash Synthetics Prime Brokerage revenue Source: Industry pool represents Coalition’s Global Industry Revenue Pool based on JPM’s internal business structure Sustained market share growth in a shrink
Slide 98: Our Markets business is client-focused and flow-driven
Our Markets business is client-focused and flow-driven with strong financing and client solutions businesses 2 0 1 6 B U S I N E S S U P D A T E S 2014 2016 Consistent, diversified performance from client solutions businesses Financing-related revenue growth reflects optimization and repricing 2014
Slide 99: Increased revenue while optimizing cost base and capital
$17.5 $20.9 2014 2016 2014 2016 We have increased revenue while diligently optimizing our cost base and capital 2 0 1 6 B U S I N E S S U P D A T E S Markets expense Markets GSIB optimization Standardized Markets RWA 2014 2016 +0% (14%) (17%) Markets revenues ($B) Markets net income 2014 2016 +20% M
Slide 100: 2016 was very strong: you will recall this slide from last year
2016 was very strong: you will recall this slide from last year 2 0 1 6 B U S I N E S S U P D A T E S We had some businesses with lower fully-loaded ROE With strong marginal contribution and operating leverage, our businesses were well positioned for growth in revenue Return on equity of Fixed I
Slide 101: Scale drives high ROE and operating leverage
Scale drives high ROE and operating leverage; as a result, 2016 revenue outperformance was highly accretive M a c ro S pre a d R u n - of f 15% 15% 15% 18% Equities and Prime Fixed Income Overall Securitized Products Credit Trading Public Finance Rates Trading Currencies & Emerging Markets Commoditi
Slide 102: Creating an end-to-end digital experience for clients
We are creating an end-to-end digital experience for clients to simplify their engagement with us and enable them to embrace market change 2 0 1 6 B U S I N E S S U P D A T E S Markets 4 Invest for the future 4 Engage clients digitally across the entire trade lifecycle Complete product suite to
Slide 103: Potential further headwinds from market structure evolution
Potential further headwinds from market structure evolution remain uncertain, but seem manageable Markets Electronic trading is growing fast, but from a low base1… 2014 2016 Non-Electronic Electronic … however, the additional impact is manageable … and market structure continues to evolve… Uncertain
Slide 104: Markets headwinds and tailwinds
2010 Decline 2015 Increase 2016 Cyclical Product elimination Margin compression Strong macro tailwinds along with FICC revenue pool stabilization Emerging markets to be long-term driver of growth4 Rates expected to rise across developed markets3 Markets Headwinds and tailwinds 5 2 0 1 6 B U S I N E
Slide 105: Agenda
Agenda Page Financial targets 19 2016 Business updates 5 Financial performance 1 C O R P O R A T E & I N V E S T M E N T B A N K
Slide 106: Medium-term ROE and financial targets
0.8% 0.3% (0.2%) (0.3%) (0.6%) (2%+/-) 2016 Revenue Rates Expense initiatives Legal and control related Other Higher capital requirement Medium-term target 16% 1 Includes impact of normalized tax rate and credit cost 2 Normalizing for lower level of legal expense in 2016 1 14%+/- 2 ~$36B 55%+/- $70B
Slide 107: Looking forward
Looking forward Continue deepening relationships as part of our commitment to a client-centric franchise Maintain leading positions and avoid complacency Embrace change and adapt business model to disruptive forces Emphasize innovation and technology investment to improve client experience a
Slide 108: 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 109: Asset & Wealth Management
A S S E T & W E A L T H M A N A G E M E N T February 28, 2017 Mary Erdoes, Chief Executive Officer Asset & Wealth Management
Slide 110: Innovate and adapt; client driven
Innovate and adapt New solutions: Smart beta, multi-asset, alternatives, ESG, insurance, digital New partnerships/investments: InvestCloud, Global X New insights: Research intensive (Guide to the Markets used by 1 in 3 U.S. advisors) Client driven Trust: Nearly 200 years of being a fiduciary
Slide 111: AWM key metrics and records
A S S E T & W E A L T H M A N A G E M E N T AWM key metrics and records Alpha Flows Industry challenges Client assets (EOP, $T) Revenue ($B) Pretax income ($B) PTM (%) ROE (%) 26% 28% 29% 29% 27% 29% 25% 24% 23% 23% 21% 24% $2.5 $2.4 $2.4 $2.3 $2.1 $1.9 $12.0 $12.1 $12.0 $11.4 $10.0 $9.6 2011 2012 2
Slide 112: Despite near-term challenges, leading long-term performance
Despite near-term challenges, leading long-term performance A S S E T & W E A L T H M A N A G E M E N T Total JPMAM % of 2016 JPMAM long-term mutual fund AUM over peer median1 (net of fees) 5-year 3-year 1-year 10-year 83% 79% 72% 54% 84% 85% 77% 59% 77% 61% 64% 46% 90% 88% 68% 52% Equity Fixed Inco
Slide 113: Long-term AUM flows by asset class and region
$30B Liquidity Liquidity Liquidity Brokerage Custody Deposits Credit Brokerage Custody Deposits Credit Brokerage Custody Deposits Credit Fixed Income Equity Multi- Asset Alts JPMC WM US EMEA Asia LatAm AM US EMEA Asia LatAm Fixed Income Equity Multi- Asset Alts JPMC WM US EMEA Asia LatAm AM US EMEA
Slide 114: #2 in total flows over the past 5 years
A S S E T & W E A L T H M A N A G E M E N T #2 in total flows over the past 5 years (large public peers) 2012 2013 2014 2015 2016 Peer 1 Peer 11 Peer 11 Peer 11 Peer 11 Peer 111 JPMC Peer 2 JPMC Peer 6 JPMC JPMC Peer 2 JPMC Peer 6 Peer 10 Peer 6 Peer 63 Peer 3 Peer 5 Peer 3 JPMC Peer 5 Peer 34 Peer
Slide 115: Assets, revenue, and pretax income records
2016 Revenue ($B) 2016 Pretax income ($B) Assets, revenue, and pretax income records A S S E T & W E A L T H M A N A G E M E N T 2016 Client assets ($T) $1.4 BK1 TROW1 $2.2 $2.5 NTRS8 $0.7 $0.8 $1.1 $0.8 GS5 $5.1 CS2,6 $2.9 MS2 $2.4 $1.4 BLK1 $2.7 JPMC3,4 $1.6 UBS2 WFC5 $0.5 BEN1 DB AM7 Allianz1 BAC
Slide 116: Adapting and innovating are keys to success
Adapting and innovating are keys to success A S S E T & W E A L T H M A N A G E M E N T Our view Industry headlines1 Active “versus” Passive Fee Compression Both active & passive are key building blocks for stronger portfolios Clients want advice, service, and solutions … not just products Fee
Slide 117: Serving clients across wealth spectrum
Serving clients across wealth spectrum, leading with advice and thought leadership A S S E T & W E A L T H M A N A G E M E N T Retail Ultra High Net Worth Affluent High Net Worth Institutional Mass Affluent Reserve card Direct investing Prime Services IRAs Custom credit solutions Private Foundations
Slide 118: Growing credit book and deposits
Growing credit book … 2010 2009 $70 $30 2013 2011 2008 2012 $121 2014 2015 2007 2006 2016 15% CAGR JPMC WM1 year-end spot balance ($B) 5yr CAGR 15% 10% Continuing to advise WM clients on both sides of their balance sheet Growing deposits $136 $290 +19% CAGR 2016 $52 2015 2008 2009 2010 2011 2012 201
Slide 119: Revenue growth vs. peers
Revenue growth vs. peers JPMC WM revenue mostly recurring, and leading peers in growth 2011-16 CAGR Annual revenue growth Leading revenue growth A S S E T & W E A L T H M A N A G E M E N T 2.2% 3.7% JPMC WM1 Peer 5 Peer 4 Peer 1 1.4% Peer 2 1.4% 3.9% Peer 3 10.7% 8.5% 5.5% 10.8% 18.4% 11.0% 1.7%1.4%
Slide 120: JPMAM Equity: strong performance
$2.7mm $2.4mm $2.1mm $1.8mm $1.5mm $1.2mm $0.9mm $0.6mm $0.3mm $0.0mm 15% 10% 5% 0% -5% -10% JPMAM Equity: Global, research-driven teams delivering strong performance A S S E T & W E A L T H M A N A G E M E N T Strong performance across entire platform1 Growth Advantage Fund 01/06 – 01/17 JPMAM Grow
Slide 121: JPMAM Fixed Income strategies
JPMAM Fixed Income strategies: Strong growth across broad platform A S S E T & W E A L T H M A N A G E M E N T Performance #2 in active flows over 5 years (large public peers) 2016 2006 U.S. Broad Markets Global Broad Markets High Yield Emerging Markets Municipals Unconstrained/Specialty Global Solu
Slide 122: Growth engines: Alternatives
Real Assets Private Equity Hedge Funds Liquid Alternatives Other WM AUS 2016 $213 2011 $157 Growth engines: Alternatives A S S E T & W E A L T H M A N A G E M E N T Strong investment performance Diversified and growing platform JPMAM 5Y return vs. benchmark 17.3% 11.4% 4.6% 3.6% 3.5% 12.7% 11.2% 0%
Slide 123: Growth engines: Solutions
Growth engines: Solutions A S S E T & W E A L T H M A N A G E M E N T 2016 2011 #5 Peer #8 JPMAM #1 Peer 16% 5% 4% AUM Ranking3 5Y CAGR4 Growth of $1mm6 Growth powered by underlying investment capabilities 2011 2016 Industry: 12% CAGR1 JPMAM: 25% CAGR In s ura n c e S mar tR et ire m e n t 2011 2016
Slide 124: Where we invest
Where we invest T e c h n olog y ( % of re v ) T ota l e x p e n s e s ( % of re v ) Digital Wealth Management AM Spectrum Agile & The Cloud Enables client engagement choice Frequent, rapid release cycles Adaptable, next-generation architecture J.P. Morgan’s private cloud Reduce legacy footp
Slide 125: AWM poised for continued growth
A S S E T & W E A L T H M A N A G E M E N T AWM poised for continued growth, leveraging the full spectrum of JPMC Innovation Risk management Developing new solutions internally, and jointly with strategic partners Proven ability to organize around emerging business opportunities Risk managemen
Slide 126: Notes appendix
Notes appendix Page 1 1. The “% of 10-year JPMAM long-term mutual fund AUM outperform peers” 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, 2016. All quartile rankings, the as
Slide 127: Notes appendix (continued)
Notes appendix Page 5 (continued) 3. Long-term AUM and brokerage 4. Long-term AUM, brokerage, and deposit 5. Long-term AUM, fee-generating brokerage, and deposits in fee-generating brokerage accounts 6. Total AUM, Brokerage, and deposit 7. Includes client asset flows attributable to private banking
Slide 128: Notes appendix
Notes appendix Page 10 Source: Company filings Note: Peer set includes comparable publicly disclosed businesses (MS, WFC, UBS, BAC, CS) 1. Pro-forma, reflecting WM (as reported) plus CWM Investments and CPC Deposits 2. Recurring revenue includes discretionary/managed, credit, deposit, fiduciary, cus
Slide 129: Notes appendix (continued)
Notes appendix Page 11 (continued) 7. Source: Morningstar. 1-Year Excess Return for “C (acc) EUR” share class over MSCI Europe Net Return EUR index. Other share classes may have higher expenses, which would lower returns. 8. Value of $1,000,000 invested on January 31, 2006 into JPMorgan Europe Dynam
Slide 130: Notes appendix (continued)
Notes appendix Page 12 (continued) 6. Source: Morningstar. 3-Year Excess Return for Select Share class over Bloomberg Barclays Multiverse Total Return Index. Other share classes may have higher expenses, which would lower returns. 7. Percentage of monthly periods with 3Y positive excess returns in S
Slide 131: Forward-looking statements
Forward-looking statements A S S E T & W E A L T H M A N A G E M E N T 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 manage
Slide 132: Consumer & Community Banking
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 February 28, 2017
Slide 133: Agenda
Page Agenda 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 1 Payments 13 Mortgage Banking 24 Banking 37 Appendix 57
Slide 134: We remain focused on a consistent set of strategic priorities
We remain focused on a 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 Deepen relationships with our customers, simplify and improve customer experience Increase digital engagement by delivering differentiated experiences Continue in our unwavering comm
Slide 135: Performance targets
Performance targets 2015 2016 Medium-term guidance (+/-) 2016 Investor Day Medium-term guidance (+/-) Business Banking Net charge-off rate 0.66% 0.61% 0.60% 0.70% Mortgage Banking Net charge-off rate1 0.18% 0.10% 0.10% 0.15% Card Services Net charge-off rate 2.51% 2.63% 3-3.25% 2.50% Net revenue rat
Slide 136: Continued strong momentum across key business drivers
We have continued strong momentum across key business drivers, driven by consistent investment 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 Key business drivers ($B, except ratios and where otherwise noted) 2016 YoY ∆ Consumer & Community Banking Households1 (mm) 60.0 4% Active mobile
Slide 137: Strong growth in deposits and core loans
Consumer & Community Banking avg. loans1 ($B) We continue to see strong growth in deposits and core loans C O N S U M E R & C O M M U N I T Y B A N K I N G Consumer & Community Banking avg. deposits ($B) $414 $453 $487 $531 $587 2012 2013 2014 2015 2016 $109 $110 $114 $118 $125 $53 $57 $69 $108 $151
Slide 138: Business drivers have supported revenue growth
Business drivers have supported revenue growth, with offsets in Card investments and deposit margin compression C O N S U M E R & C O M M U N I T Y B A N K I N G CCB revenue ($B) Note: Numbers may not sum due to rounding; chart not to scale 1 Excludes Auto lease income, new Card origination costs, a
Slide 139: Invested heavily in technology and marketing with strong returns
We have invested heavily in technology and marketing – and we are seeing strong returns Select investments Results ~$550mm pre-tax benefit in current annual run-rate ~4.3mm new accounts ~$44.4B annual spend ~$8.2B average outstandings Credit Card new account marketing1 Consumer Banking new a
Slide 140: Growing digitally-engaged customer base
4Q12 4Q16 All other households Digitally-engaged households Our growing digitally-engaged customer base delivers strong performance metrics C O N S U M E R & C O M M U N I T Y B A N K I N G Consumer Bank households – impact of digitally-engaged households1 % of households who are digitally-engaged A
Slide 141: Strong growth across key business drivers while unit costs decreased
CCB has experienced strong growth across key business drivers, outpacing operational volumes, while unit costs significantly decreased C O N S U M E R & C O M M U N I T Y B A N K I N G Strong momentum across key business drivers1… Average deposit growth 9% Average core loan growth 16% Card new accou
Slide 142: Substantially reduced expense while investing
We have substantially reduced expense, while continuing to prudently invest C O N S U M E R & C O M M U N I T Y B A N K I N G CCB expense ($B) Overhead 58% 55%4 Headcount3 148.2K 141.0K ~$2.4B CCB structural expense5 ~225 bps CCB overhead ratio6 ~7K CCB headcount3 $25.6 $25.0 ($2.4) $1.0 $0.7 2014 S
Slide 143: Structural expense reduction initiatives
Our structural expense reduction initiatives are substantially complete, but work to eliminate waste will always continue C O N S U M E R & C O M M U N I T Y B A N K I N G Structural expense initiatives overview Select initiatives Structural savings (2016 exit vs. 2014) Accomplishments since 2014 Mo
Slide 144: Next wave of expense reduction strategies
We are focused on executing the next wave of expense reduction strategies C O N S U M E R & C O M M U N I T Y B A N K I N G Focus areas Planned strategies Operations integration ■ Increase data sharing with partners to reduce fraud ■ Reduce the cost of metal and plastic cards Branch transformation ■
Slide 145: Expect ~50% overhead ratio in the medium-term
We expect to achieve a ~50% overhead ratio in the medium-term C O N S U M E R & C O M M U N I T Y B A N K I N G CCB overhead ratio 1 Excludes incremental auto lease income 2 Includes marketing, investments in payments and digital innovation and technology, and business growth 12 55% ~50% (~5%) ~1% ~
Slide 146: Agenda
Page Agenda C O N S U M E R & C O M M U N I T Y B A N K I N G Payments 13 Consumer & Community Banking 1 Mortgage Banking 24 Banking 37 Appendix 57
Slide 147: Payments key business drivers
Key business drivers ($B, except ratios and where otherwise noted) 2015 2016 YoY ∆ Payments Card average loans $126 $131 4% Card end of period loans $131 $142 8% Credit card sales volume1 $496 $545 10% Debit & credit card sales volume1 $754 $818 9% Merchant processing volume $949 $1,063 12% Card new
Slide 148: Leading market positions in payments
Our strong business performance has resulted in leading market positions P A Y M E N T S 07/20/11 General purpose credit card sales market share1 General purpose credit card EOP outstandings market share1 Source: Company filings; internal JPMorgan Chase estimates Note: Numbers may not sum due to rou
Slide 149: Payments strategy
Payments strategy Integrated Merchant Experience Core acquiring and processing services ChaseNet closed loop system Integrated merchant loyalty Consumer to Business Deliver superior consumer value by launching new and enhanced products Lead payments innovation with unique solutions Our ove
Slide 150: New product launches and marketing drive engagement
2012 2016 New product launches and a broad investment in marketing have generated strong customer engagement and return on our investment P A Y M E N T S 2012 2016 2012 2016 2012 2016 Acquisition vintage in-year performance Total portfolio performance ~2x +7% CAGR >2x +7ppt Vintage in-year sales Vin
Slide 151: Sapphire Reserve customer characteristics
The new Sapphire Reserve customers we are acquiring have attractive characteristics P A Y M E N T S Early adopter profile of Sapphire Reserve customers as of December 2016 Average FICO score >785 Lift in On Chase spend2 >50% Average Deposit & Investment wallet >$800K 1 Reflects self-reported income
Slide 152: Chase Card FICO mix vs. competitors
Chase Card has modest exposure to FICO <660, and is lowest in the 640 – 720 range 28% 29% 30% 31% 34% 38% Chase AXP DFS C COF BAC Chase vs. competitors – FICO <660 portfolio mix1 Chase vs. competitors FICO (640 – 720) portfolio mix2 15% 15% 34% 36% 25% 25% 17% 18% 16% 15% 14% 14% 1Q15 2Q15 3Q15 4Q15
Slide 153: Increased efficiencies within acquisition channels
Digital 77% Branch 13% Direct mail 8% Other 2% Increased efficiencies within our acquisition channels P A Y M E N T S Acquisitions are moving to lower cost channels 2016 new credit card accounts by channel1 Increased mobile acquisitions 1 Data excludes Commercial Card and certain terminated partner
Slide 154: Chase QuickPay and P2P
Our investments in Payments extend into P2P, an important emerging segment, and we continue to enhance and grow our P2P offering with Chase QuickPay We are well positioned to succeed in P2P Active mobile CBB households1 $28B 2016 Chase QuickPay volume 94mm 2016 Chase QuickPay transactions 15mm 90 da
Slide 155: Chase Pay
Chase Pay, our proprietary digital solution, expands the capabilities of our successful core business with an innovative product P A Y M E N T S Track purchases Pay securely Easy digital checkout Keep cards updated Order/pay ahead1 Automatic savings Key Features Key Partners LevelUp 1 Order/pay ahea
Slide 156: Commerce Solutions surpassed $1 trillion in processing volume
$655 $1,063 2012 2016 P A Y M E N T S Commerce Solutions surpassed $1 trillion in processing volume Commerce Solutions total processing volume ($B) +13% CAGR New company relationships by referral source1 Internal >55% External <45% Deal closure rate by relationship1 Prospects Existing JPM clients +2
Slide 157: Payments accomplishments and direction
#1 position in both credit card sales and outstandings market share1 Surpassed $1T in merchant processing volume Successfully launched new partner and branded products Renewed 80% of co-brand sales volume in the last two years Launched Chase Pay with Starbucks and Best Buy What we’ve accompl
Slide 158: Agenda
Page Agenda C O N S U M E R & C O M M U N I T Y B A N K I N G Mortgage Banking 24 Payments 13 Consumer & Community Banking 1 Banking 37 Appendix 57
Slide 159: Mortgage Banking strategy
We continue to execute against our strategy of building a higher quality and less volatile mortgage business M O R T G A G E B A N K I N G Maximize our share of high quality originations Improve quality of servicing portfolio and de-risk the business Deliver a great customer experience Progress Im
Slide 160: Underlying performance of the business is strong
The underlying performance of the business is strong Key business drivers ($B, except ratios and where otherwise noted) 2015 2016 YoY Δ Mortgage Production Total mortgage origination volume $106 $104 (3%) Consumer origination volume $36 $44 23% Correspondent origination volume $70 $59 (16%) Home equ
Slide 161: Improvement in customer satisfaction
We have seen improvement in internal and external measurements of customer satisfaction J.D. Power Mortgage surveys2 Annual Net Promoter Score1 2012 2013 2014 2015 2016 Chase rank 2015 2016 ’15 – ’16 change Originations Servicing 7 10 5 6 +2 +4 2010 12 13 1 Net Promoter Score = % promoters minus % d
Slide 162: Focused on high-quality originations
We are focused on high-quality originations… 1 Source: IMF. Firmwide mortgage originations for top 5 ranked banks. Includes Conventional, Government, Jumbo, and excludes Home Equity 2 Source: IMF and JPMorgan Chase internal data. Mortgage Banking only originations. Excludes Private Bank and Home Equ
Slide 163: Strong core loan growth
…and continue to see strong core loan growth $51 $53 $57 $69 $108 $151 $174 $152 $132 $114 $96 $81 $225 $205 $189 $183 $204 $232 2011 2012 2013 2014 2015 2016 2011 – 2016 CAGR Non-core: (14%) Core: +24% Total: +1% Mortgage Banking average loan balances ($B) % of originations retained3 3% 4% 11% 33%
Slide 164: Strong credit performance
2.37% 0.85% 0.37% 0.18% 0.10% FY12 FY13 FY14 FY15 FY16 Mortgage Banking net charge-off rate2 trend We continue to maintain strong credit performance (227) bps 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 4Q12 4Q13 4Q14 4Q15 4Q16 Mortgage Banking1 30+ delinquency rate (%) 3 1 Excludes PCI loans and mortgage loans i
Slide 165: Actively managing servicing book
We are actively managing our servicing book by bringing in high-quality new originations while reducing our volume of low-quality units 2014 – 2016 Chase servicing book activity Units 30+ delinquency rate New originations ~790K 0.02% Acquired servicing ~235K 0.10% Total “in flows” ~1,025K 0.04% Unit
Slide 166: Default inventory declining, lower servicing expense
Our default inventory continues to decline, driving lower overall servicing expense Non-Performing Performing Servicing cost per unit1 Note: Numbers may not sum due to rounding 1 2015 Chase data as defined by the Mortgage Bankers Association (MBA) in the Stratmor survey 2 Credit costs excluded from
Slide 167: Home equity interest-only recast risk
We are through a significant portion of home equity interest-only recast risk for the legacy Chase book, with performance in line with expectations Note: Excludes PCI portfolio. Data as of December 2016 1 Based on carrying value; excludes home equity balloon loans that maintain an interest only paym
Slide 168: Smaller, purchase-driven mortgage market
We anticipate a smaller, purchase-driven market, with tightening primary and secondary spreads 1 Source: IMF 2014 through 2016; 2017F reflects average of forecasts from Fannie Mae (1/10/17), Freddie Mac (1/30/17), and MBA (1/19/17) 2 Source: Freddie Mac Primary Mortgage Market Survey (PMMS). Represe
Slide 169: Piloting a digital mortgage experience
We are piloting a digital mortgage experience to address the needs of an increasingly tech-centric customer base Transparent – customers always know where they stand in the process Convenient – customers can securely upload documents to the platform Connected – customers can e-sign documents Custo
Slide 170: Growth opportunity within Chase customer base
We have a tremendous growth opportunity within our own Chase customer base – our performance with CPC1 customers shows the power of a differentiated experience CCB household distribution by homeownership ~5mm2,4 Chase mortgage % of Chase customers originating a mortgage with Chase by relationship ty
Slide 171: Remain focused on executing against our strategy
We remain focused on executing against our strategy M O R T G A G E B A N K I N G Improved the customer experience Enhanced the quality of the servicing portfolio and de-risked the business Substantially reduced expenses Grown our balance sheet with high quality originations What we’ve accompli
Slide 172: Agenda
Page Agenda C O N S U M E R & C O M M U N I T Y B A N K I N G Banking 37 Payments 13 Mortgage Banking 24 Consumer & Community Banking 1 Appendix 57
Slide 173: Consumer & Business Banking strategic priorities and progress
Consumer & Business Banking strategic priorities and progress B A N K I N G Acquire and deepen relationships Increase digital engagement Drive down expenses Progress Grew Consumer & Business Banking deposits & investments by ~$250B – a 10% CAGR since 2012 Acquired ~2.7mm net new consumer checkin
Slide 174: Consumer & Business Banking key metrics
2015 2016 YoY Δ Relationships (mm) Consumer households 23.3 23.9 3% Business households1 2.4 2.5 4% Financial metrics ($B) CBB revenue $18.0 $18.7 4% CBB non-interest expense $11.9 $11.8 (1%) CBB overhead ratio 66% 63% (3 ppt) Balances ($B) Average deposits2 $515 $571 11% Deposit margin2 1.90% 1.81%
Slide 175: Leading the industry in deposit balance growth
9.8% 6.3% 2.7% 2.8% Chase National Banks Super Regional Other Change in deposits vs. industry (2012 – 2016 CAGR)1 Industry avg. growth = 4.0% We continue to lead the industry in deposit balance growth B A N K I N G Note: For footnoted information, refer to appendix 39
Slide 176: Physical presence in faster growing markets
We have established our physical presence in faster growing markets B A N K I N G Chase performance in top 10 Chase markets (2012 – 2016)1 Chase top 10 markets by deposit balances (2016) Chase $ deposit growth rank Chase deposit share (2016) Chase share of $ deposit growth Chase growth rate vs. indu
Slide 177: Three-quarters of growth from customers who use branches
Three-quarters of our growth has come from customers who use our branches B A N K I N G Chase Consumer Bank deposit growth attribution by channel usage segment (2012 – 2016)1 Digitally- centric 18% Multi- channel 60% Branch- centric 16% Other 6% Households across generations continue to use the bran
Slide 178: Digital engagement embeds us in customers' daily lives
Digital engagement embeds us in our customers’ daily lives – on average, mobile banking users have 5 mobile log-ins per week B A N K I N G Chase leadership positions #1 rated mobile banking app and #1 in active mobile users among large bank peers1 #1 most visited banking portal in the U.S.2 #1 ATM n
Slide 179: Digital engagement and record low attrition
2012 2013 2014 2015 2016All other households Digitally-engaged households Digital engagement is a contributing factor to our record low attrition B A N K I N G 4Q12 4Q16 Digitally-engaged households All other households Digitally-engaged households are growing rapidly…1 HH growth (2012 – 2016 CAGR)
Slide 180: Winning experience while reducing structural expenses
2014 2016 2014 2016 While delivering this winning experience, we have also reduced structural expenses B A N K I N G Annual teller transactions (mm) (~130mm) Annual self-service/digital transactions (mm)2 Online Mobile ATM % change +118% +1% (39%) ~+180mm Today, ~80% of transactions are completed th
Slide 181: Optimizing the branch network
Flexibility to exit within 5 years ~75% Lease maturity beyond 5 years ~25% 2016 branch network As branch servicing volume decreases, we continue to optimize our network B A N K I N G Real estate optionality 10% 12% 15% 11% 13% 17% Increasing branch count Maintaining branch count Reducing branch coun
Slide 182: A clear, focused strategy
We have a clear, focused strategy B A N K I N G Primary bank for more than 70% of our consumer households1 Leading brand perception in trust and advice Leading physical presence and digital capabilities Strong positioning with Millennials Success in promoting self-service options for every
Slide 183: Chase has built a powerful small business franchise
Chase has built a powerful small business franchise B A N K I N G Chase for Business assets Business card #2 small business credit card issuer by purchase volume4 Merchant services #2 merchant acquirer5 Deposits #3 primary bank market share3 Mobile offering Branches #1 rated mobile app for a large b
Slide 184: JPMC platform value proposition for small businesses
The JPMC platform offers a unique value proposition to small businesses ~75% of customers have a Consumer Banking account1 ~30% of customers use Chase Card Services1 15% of Relationship Managed customers use Commerce Solutions products1 200+ customers grew into Commercial Banking clients in
Slide 185: Omni-channel capabilities for small businesses
4Q14 4Q16 Omni-channel capabilities enable Chase to meet the needs of small businesses B A N K I N G Small businesses increasingly interact digitally, leading to a decrease in teller transactions Small businesses continue to rely upon the branch network, particularly for complex interactions 55% 29%
Slide 186: Strong performance led by expansion markets
2014 2016 Core markets Expansion markets We have had strong performance since 2014 led by our expansion markets B A N K I N G 2014 2016 Core markets Expansion markets Deposits average daily balance Loan average daily balance 2014 – 2016 CAGR ▲ 18% ▲ 8% 2014 – 2016 CAGR ▲ 21% ▲ 2% +10% CAGR 6% CAGR 5
Slide 187: Fragmented small business market creates opportunity
The small business market is fragmented, creating an opportunity for Chase to consolidate primary bank share and deepen product penetration Small business primary bank market share1 Small business product usage 81% 48% 43% 10% Business card Merchant services Deposit + Card + Merchant services All th
Slide 188: Deepening engagement with Relationship Managed customers
Deepening engagement with Relationship Managed customers through multi- product relationships leads to stronger deposit and revenue growth Impact of small businesses choosing Chase for multiple products Business Banking + Chase Card1 21% higher deposit balances 43% higher deposit balances Business B
Slide 189: We continue to invest for further growth
We continue to invest for further growth B A N K I N G Deposits and business loans Business card Merchant services Chase Business Quick Capital (OnDeck) Next-day funding and product simplification Expanded product set and improved credit decision time Investment initiatives Digital platform New Chas
Slide 190: Fintech collaboration can accelerate our growth
Fintech collaboration can accelerate our growth B A N K I N G Chase Business Quick Capital 2012 2016 1.6 9.6 +57% CAGR Small business online lending in the U.S. ($B)1 1 Loan originations derived from internal JPMorgan Chase estimates using select financial reporting of online marketplace lenders and
Slide 191: Net Promoter Score and primary bank market share
9.5% 8.8% 9.6% 9.7% 6.2% 8.5% 4% 8% 12% 2012 2013 2014 2015 2016 Bank of America Wells Fargo Chase Our Net Promoter Score and primary bank market share show the momentum we have to build upon Primary bank market share of top 3 banks2 We have grown primary bank market share from ~6% to ~9% over the p
Slide 192: Competitive positions and remaining opportunity
We have competitive positions across our businesses, and opportunity remains to continue to grow Consumer relationships with almost half of U.S. households #1 in primary bank relationships within Chase footprint1 Powerful customer franchise Access to J.P. Morgan investment expertise, advice, a
Slide 193: Agenda
Page Agenda C O N S U M E R & C O M M U N I T Y B A N K I N G Appendix 57 Payments 13 Mortgage Banking 24 Banking 37 Consumer & Community Banking 1
Slide 194: Appendix footnotes
1. Consumer Bank household channel segments are defined based on the tenure of the household as of the respective time period. For households with tenure of greater than 12 months, we use the following thresholds calculated over a year: Digitally-centric – <=4 branch visits and 12+ digital transacti
Slide 195: Notes on slide – substantially reduced expense
Notes on slide 9 – We have substantially reduced expense, while continuing to prudently invest A P P E N D I X Note: Numbers may not sum due to rounding; 2016 exit reflects 4Q16 annualized 1. Includes marketing, investments in select payments and digital projects, and select business growth and tech
Slide 196: Appendix footnotes
1. FDIC 2016 Summary of Deposits survey per SNL Financial. Excludes all branches with $500mm+ in deposits in any of the last ten years (excluded branches are assumed to include a significant level of commercial deposits or are headquarter branches for direct banks). Includes all commercial banks, cr
Slide 197: Appendix footnotes
1. FDIC 2016 Summary of Deposits survey per SNL Financial. Excludes all branches with $500mm+ in deposits in any of the last ten years (excluded branches are assumed to include a significant level of commercial deposits or are headquarter branches for direct banks). Includes all commercial banks, cr
Slide 198: Appendix footnotes
1. Represents growth from 4Q12 to 4Q16. Consumer Bank household channel segments are defined based on the tenure of the household as of the respective time period. For households with tenure of greater than 12 months, we use the following thresholds calculated over a year: Digitally-centric – <=4 br
Slide 199: Notes on slide – competitive positions across our businesses
Notes on slide 56 – We have competitive positions across our businesses, and opportunity remains to continue to grow A P P E N D I X 1. Kantar TNS 4Q16 Retail Banking Monitor. Data is based on total U.S. (5K surveys per quarter) and Chase footprint (~2.8K surveys per quarter); Calculations derived f
Slide 200: Forward-looking statements
Forward-looking statements A P P E N D I X 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 sign