Corporate & Investment Bank - JPMorgan Chase
CORPORATE &INVESTMENT BANKFebruary 25, 2020FIRM OVERVIEWCORPORATE & INVESTMENT BANKCONSUMER & COMMUNITY BANKINGASSET & WEALTH MANAGEMENTCOMMERCIAL BANKING
AgendaPage1CIB Overview12Banking123Securities Services214Closing Remarks285Notes31
ANIMATIONWe delivered strong results and record revenues in 2019Adjusted revenue and net income1 ( B)CIB ROE 114%16%14%16%14%Capital ( B) 62 64 70 70 805030% 36.445 Revenue140 35.130 34.6 33.320%16%15% Heritage TSS ROE Heritage IB ROE15%15%15%252025%20%18%35 38.314%10%14%10%10%155%10 Net income15 9.2 10.9 10.8 12.0 12.30%0Overhead ratio1-5%2015201620172018201959%54%56%57%55%Note: For footnoted information, refer to slide 31Note: This presentation includes certain non-GAAP financial measures, which exclude the impact of past business simplification actions andlegal expense. For footnoted information, refer to slide 31 for a reconciliation of reported results to these non-GAAP financial measures1
Expenses increased due to higher revenues and additional investments2018 to 2019 ( B)1 0.2 20.7 0.1 0.4 (0.3) 21.1In-line with2019 outlookof sNon-techinvestments57%Other201955%Expense adjusted for legal expense. For footnoted information, refer to slide 312
ROE decreased from 15.9% in 2018 to 14.0% in 2019, primarily driven by ( 2%)15.9%14.4%14.0%14.50%20181Revenue related1RatesExpensesIncludes changes in revenues and revenue related expenses3Credit cost,tax, & otherHigher capital2019Legalexpense0.4%
CIB has a strong track record of gaining market share and establishing leadership globallyNumber of businesses ranked #1 #2-3 #4 2019 global leadership positions compared to peers1,2,31671JPMPeer 1Peer 2Peer 3Peer 4Peer 5Since 2015, we have gained share in each region and across businesses1,42Americas#1EMEA201510201912Expanded leadership in 4 categories141472015#182019#1 in 7 additional categories since 201514121APAC#3102620151672019Closing gaps through investments14Note: For footnoted information, refer to slide 324
Global Investment Banking grew market share for 4 consecutive years to 9.0% Industry wallet ( B)GIB Market share Industry wallet ( B)M&A8.3%8.3%8.4%8.7%9.2% 24 25 26 29 8.1% Market shareDCM 772015 762016 842017 8120187.9%7.9% 34 37 40 37 36201520162017201820196.9%7.4%7.1% 19 14 18 16 1520152016201720182019 772019ECM#1 worldwide inInvestment Banking feesfor 11 consecutive yearsParticipated in all top 5fee paying deals in 2019,and 7 of top 10 fee dealsSource: Dealogic as of Jan. 2, 2020; ECM excludes shelf deals. DCM includes all Bonds, Loans, and other debt (i.e., Securitizations and Frequent Borrowers), excluding money market, short-term debt59.0%9.4%
Securities Services achieved record mandates and continues to grow fee revenue, offsetting theimpact of the challenged rate environmentExpanding business with existing clients and winning new mandates Assets Under Custody1 16% Assets Under Administration( T) translating to resilient revenue performanceNOT TO SCALE1( B)-1% 24%27 Total Revenue4.24.1201820192320182019Caliber of our team and consistency ofour service delivery has resulted inrecord new business wins20182019Onboarding additional administrationmandates from existing custody clientsNote: For footnoted information, refer to slide 316Organic revenue growth partiallyoffsetting impact of challenged rateenvironment
We have leading positions in our Markets businesses and continue to gain shareGlobal Markets market share ( %)1,2Equities1 Industry wallet ( B)2019 vs. 2015 Market share8.4% 689.7% 599.9% 5911.0% 6311.3% 560.0%2015201620172018 Industry wallet ( B)11.5%11.2%11.8%12.3% 0.5%Peer 1 1.4% 0.3%Peer 2 0.9%-0.1%Peer 3 0.3%0.0%Peer 4 0.3%0.0%Peer 5 0.1% 0.4%Peer 60.0%0.0%Peer 70.0%-0.4%Peer 8-0.4%-0.4%Peer 9-0.7%-0.4%Peer 10-1.0% 0.4%Peer 11-2.6%-1.1%11.0%10.0%9.0%8.0% 116 106 97 1017.0%6.0%5.0%2015 2.5%13.0%12.0%10.1% 109JPM2019FICC1 Market share2019 vs. 201815.0%2016201720182019Note: For footnoted information, refer to slide 337
Despite increase in capital in our Markets businesses, we have maintained strong returnsImpact of capital to ROE, 2015 - 2019EquitiesFICCMarginal ROEs above cost of capitalacross all sub-products (300 bps) (600 bps)Revenue growth highly accretiveROE %Markets fully-loaded ROE, 2015 - 2019 300 bps (500 bps) 15%Advantages from scale anddiversification 13%Actively managing GSIB challengeROE 2015P&L ImpactCapital ImpactROE 20198
Our unified Wholesale Payments business delivers full suite of solutions to clients across the firmEnabling clients to Our business Make and accept payments anytime,anywhere, via any ntsSupported by a shared infrastructure:Core technology platformsMerchantAcquiringReduce complexity and optimizetheir payments operating modelClient connectivity(platforms, APIs, ERP/TMS)Onboarding and servicingData lake for analytics & MLTradeFinanceBe safe and secure through strongcontrols9Product inter-operability
Treasury Services has experienced significant revenue growth despite rates headwindsFirmwide Treasury Services revenue growth1 CIB Treasury Services CB Treasury ServicesFirmwide Treasury Services revenue growth relative to peers1,2,3NOT TO SCALE 2015 - 2019 Treasury Services revenue growth % 45%45%37% 39%36%32%7%20152019JPMCNote: For footnoted information, refer to slide 3410Peer 1Peer 2Peer 3IndustryWallet
Wholesale Payments business is well positioned to capture growth opportunitiesSMBs Partnership withCoreadvantagesBusiness Banking WePayU.S. Healthcare InstaMed Payments andacquiring capabilities Strong bankingrelationshipsCorporates Global footprint andcapabilities Leading innovations Best in class service Strong bankingrelationshipsProductopportunitiesE-Commerce Unique end-to-endFinancialInstitutions USD clearing andplatform solutioncontrols Leading innovations Redefiningcorrespondent bankingleveraging strength ofour networkGrowth opportunityTreasury ServicesMerchant ServicesGlobal TradeForeign Exchange11
AgendaPage1CIB Overview12Banking123Securities Services214Closing Remarks285Notes31
Select topics for BankingMulti-year performanceContinuity in coverageCompleteness of coverageGrowth opportunities12
We maintained #1 rank in Global Investment Banking fees and achieved 9.0% market share in2019 - the highest share in a decade Market wallet ( B)9.0% JPM .5%7.4%7.0%315 bps gap Top 5 banks (ex-JPM)1200 bps gap185 bps gap8.0%8.0% Top bank PM ce: Dealogic as of Jan. 2, 2020; ECM excludes shelf deals. DCM includes all Bonds, Loans, and other debt (i.e., Securitizations and Frequent Borrowers), excluding money market, short-term debt1 Average share of top 5 banks ex-JPM13IGLoansLVGLoans2019#1IB
We have consistently grown market share faster than peers across regions and products,improving our leadership #2#1#1#1for 9 years ina rowsince 2014from #7 in2015since 2018since 2010since 2018since 2016for 10 years ina rowNorth erformancedespite idiosyncraticvolatility in regions & productsAcross RegionsAcross ProductsFaster marketshare growthsince 2015Maintained gapto peers at Share grew faster than top 5 peers by 120 bps 140 bps50 bps280 bps100 bps160 bpsSource: Dealogic as of Jan. 2, 2020; ECM excludes shelf deals. DCM includes all Bonds, Loans, and other debt (i.e., Securitizations and Frequent Borrowers), excluding money market, short-term debt14240 bps250 bps
Continuity and completeness in coverage allows us to capture opportunity across sectors,regions, and productsThere is large variation in sector, region, and product wallets year over yearSectors wallet (2015 - 2019)Lowest YearRegional wallet (2015 - 2019)5 Year AverageHighest Year5 Year AverageLowest Year 9.1BTechnologyHighest Year 2.8B2015-19%2019 14%China2015-17%25%2018 2016DCMM&ASource: Dealogic as of Jan. 2, 2020; ECM excludes shelf deals. DCM includes all Bonds, Loans, and other debt (i.e., Securitizations and Frequent Borrowers), excluding money market, short-term debt152019ECMDCM
Continuity and completeness in coverage allows us to capture opportunity across sectors,regions, and productsThere is large variation in sector, region, and product wallets year over yearSectors wallet (2015 - 2019)Lowest Year5 Year AverageRegional wallet (2015 - 2019)Highest YearLowest Year 9.1BTechnology2015-19%Consumer/Retail2016-21%2019 14%China2015 17%GE, AU,Switz.2015-17%2018 15% 3.7B2016-17%2018 9% 2.4B 7.0B2019-16%Highest Year 2.8B 8.7BHealthcare5 Year Average2016 7%JapanDelivering consistent financial performance requires consistentcoverage across sectors, regions, and products, through the cycle2019-22%2017 12%JPMC scale and diversity allows us to capture wallet acrosssectors, regions, and products through large fluctuationsSource: Dealogic as of Jan. 2, 2020; ECM excludes shelf deals. DCM includes all Bonds, Loans, and other debt (i.e., Securitizations and Frequent Borrowers), excluding money market, short-term debt16
Continuity and completeness in coverage across client segmentsLarge episodic transactions frequency for clients (2015 - 2019)Wallet composition across fee size (2015 - 2019)% of clients that had a large episodic transaction every% of annual wallet1 - 5 years10 years10%Large episodictransactions ( 50M fee)90%Small and mediumtransactions5 - 10 years7 YearsAverage frequency that clients executelarge episodic transactions ( 50M fees)90%Our continuity and long term client relationshipsallow us to capture these large episodic transactionsof overall industry wallet is generated fromsmall and medium transactionsOur completeness allows us to capture walletopportunities across client segmentsSource: Dealogic as of Jan. 2, 202017
We are targeted with our investments and have gained share selectively2019 Outcomes2015 SectorsTargeted investment Targeted 10 sectors 6 sectors with wallet25 sectors Improved rank in 5 sectors 4.5B Maintained #1 in 4 sectors 4 sectors with rank 3 orbelow and wallet 2.5B 2015 Countries / Regions2019 OutcomesTargeted investment25 countries /regions Targeted 6 countries / Improved rank in 3regions with wallet 1.5B countries / regions Became #1 in 2 countries /regionsSource: Dealogic as of Jan. 2, 202018
We see significant opportunities for growth in a changing industry landscape Greater insights to clients, fasterTech and analytics Enhanced banker productivity Improved client experience through digital capabilitiesIndustryTrendsEvolution of IPOmarketPrivate capital andprivate companiesOrganicGrowthOpportunityMiddle Market Rising interest in alternative solutions Shift in investor appetite, demonstrated by volatility of 2019 IPOs 150B equity private placements1 vs. 60B IPOs2 in the U.S. (2019) 7x growth in private net asset value since 2002, twice as fast as publicmarkets3 Growth in number of Middle Market targets Doubled annual new client relationships in 2019 vs 2016 Commercial Bank and Global Corporate Bank international expansionInternational Expansion of China business supported by approval of majority ownedjoint venture1Source: PitchBook Data, Inc.Source: Dealogic ( 62B)3 Source: McKinsey Global Private Markets Review 2019219
We are investing in relationships, people, and execution, while innovating to better serve ourclients and fuel our growthExpanding and optimizing our coverage universeRelationships Leverage AI/ML to expand capacity Continuously review priorities Collaborate across all lines of utionClientsEvolving existing products and processes Best-in-class solutions for private companies Redesign IPO offeringHiring and retaining the best, diverse talentPeople Leverage tech to grow workforce of the future Empower bankersPeopleInvesting in cutting-edge tech, analytics and deliveryInnovationInnovation Provide data driven insights to clients Leverage data and tools to improve operating model Address pain points of workflow20
AgendaPage1CIB Overview12Banking123Securities Services214Closing Remarks285Notes31
Select topics for Securities ServicesOur growth and performancePerspectives on an evolving industryPositioning our clients and our business for the future21
Securities Services is a key strategic business for the CIBOur businesses Our clients.By the numbers Custody 4.1B revenue2 in 2019AssetManagersFund Services#2 Custodian3 with 27T in AUC2SECURITIESSERVICESAssetOwners100% of our top 200 clients overlapwith Markets and Banking1on analysis of CIB’s client base using internal sales systemsto slide 313 Source: Company filings4 Based on internal analysis using Fund Accounting systemsLiquidityManagement & FXLending & CollateralManagement1 Based2 Refer2298 markets 20,000 daily NAVs4
Driving growth through new business wins, expansion of existing relationships, and investments innew capabilities and marketsGrowth AreasAssets Under Custody1 ( T)Assets Under AdministrationNOT TO SCALE Winning industry’s biggest mandates Successfully completed largest transition in 41%the history of our industry 55%27 Retaining and growing with existing clients Record AUC and AUA growth19 Multi-trillion AUA growth realized in FundServices, with additional multi-trillion ofmandates being on-boarded Investing in new growth potential areas New and enhanced product capabilities,including Alternatives, Analytics, CollateralManagement, ETF servicing, Middle Office Expanded market capabilities, includingChina, Saudi Arabia2015Note: For footnoted information, refer to slide 3123201920152019
Securities Services has delivered strong performance, despite headwindsStrong PerformanceOperating Margin1Revenue1 ( B)NOT TO SCALE Growing revenue in a challengedenvironment Rate compression offset by fee anddeposit growth Record fee revenue, up 4% YoY 16%4.1 7ppts3.6 Investments driving scale and efficiency Investing through the cycle Efficiency and scale improvements Transparent engagement with clients ontheir cost drivers Disciplined expense management2015Note: For footnoted information, refer to slide 3124201920152019
A changing industry landscapeIndustry trends .Margin compressionIncreased complexityNeed for accurate,timely, integrated data are driving client needs for Reduced costs Greater efficiencies Expertise and scale to support wider range of assetclasses, markets, and investment styles Shared data environments Data and analytics25
Securities Services is uniquely positioned to help our clients achieve their goalsOur strategy is centered around three key pillarsInvesting in technologywith data at the coreLeveraging the power of theCorporate & Investment Bank ‘Data backbone’ provides a cohesive Leverage Corporate & Investment Bankfoundation across our platform Enables core services to connect seamlessly Single channel connectivity acrossproducts, regions and asset classes(CIB) technology investments in derivativesand investment analytics Seamless integration of derivatives to ‘crossproduct data backbone’ Operational expertise and scale inderivatives processing26Delivering efficiencies to our clientsthrough integrated front-to-back solutions Extended enterprise workflow to increaseend-to-end automation Strategic and scalable middle officesolutions Front office solutions leveragingCIB and third party tools
Combined with the power of the franchise, Securities Services is well positioned for the futureDeep front-to-back client relationshipsDeep Insights into end-to-end client needsRelationships Trusted expertiseServiceExcellenceClientsLeveragingthe CIBUnwavering focus on delivery Seamless execution at scale Continuous improvements in efficiencyLeveraging the capabilities of the CIB tobenefit our clients World class tools and capabilities In-house expertise and scaleOngoinginvestment27Continued investment through the cycle Scale and strength to maintain investments Innovation to drive new opportunities
AgendaPage1CIB Overview12Banking123Securities Services214Closing Remarks285Notes31
Foundational technology improvements designed to enhance productivity and quality of servicesDeepen and improve investmentgovernanceModernize our apps &infrastructure Continue to optimize our 12B tech spend Migrate to fewer, more efficient data centers Reinvest efficiencies and roll-offs into infrastructure Increase speed of delivery through multi-cloudand workforcestrategy Drive higher portion of investment towards target state Improve resiliency and scalability and drive greaterreuse of components and servicesStandardize and improve oursoftware engineering practicesEmbrace and leverage newtechnologies Realize meaningful efficiency with common Continue investment in upskilling talentframeworks and training Improve speed to market through automated softwaredelivery Empower engineers with tools to support continuousimprovement Embed intelligence into business via AI and ML Create client value through deeper real time insights,new products and services, and enhanced controlenvironment28
ROE walk: 2019 actuals to medium-term target(0.3%)1.2%Legalexpense0.4% 16%0.6%14.4%14.0%2019Revenue related1Investments1Includes changes in revenues and revenue related expensesNote: Excludes the impact of the Merchant Services business realignment, which will not materially impact CIB medium-term target29Revenue 40BOverhead ratio54% /-Capital 80BStructuralMedium-term
We are global, complete, and operate at scale; positioning us well to target growth opportunitiesTransforming for the futureOptimizing our currentmodelMaintaining day-to-daydisciplineIncreased client breadth and depthOmni-channel client connectivityBest-in-class products and servicesIntegrated infrastructureRelentless focus on clientexperience and ease of doingbusinessClose addressablegaps in our walletBest-in-class execution anddelivery of our strategic prioritiesAccelerating organic growthReshaping our approach to data tounlock the true power of ML & AIUnfaltering risk, credit, capital,liquidity and expense disciplineFortifying our businesses toperform through the cycleDevelop new businessopportunities and create anunparalleled client experience 3.5-5.5BInvest in new and emerging tech todevelop a future-proof infrastructureGrowth opportunity from both share gain and wallet expansionESG principles embedded in day-to-day operations and long-term strategy30
AgendaPage1CIB Overview12Banking123Securities Services214Closing Remarks285Notes31
Notes on non-GAAP financial measures1. The CIB provides certain non-GAAP financial measures, which exclude the impact of past business simplification and exit actions, and legal expense on revenue, expense, net income, returnon equity (“ROE”), overhead (“OH”) ratio, and Securities Services’ revenue and assets under custody (“AUC”). Management believes this information helps investors assess the underlyingperformance of the business as well compare the CIB’s and Securities Services’ performance over the periods presented. These measures should be viewed in addition to, and not as asubstitute for, the CIB’s reported results. The tables below provide a reconciliation of reported results to these non-GAAP financial measures.Reconciliation of reported to adjusted resultsCIBYear ended December 31,(in millions, except where otherwise noted)(1) Revenue
Treasury Services has experienced significant revenue growth despite rates headwinds 2015 - 2019 Treasury Services revenue growth % Firmwide Treasury Services revenue growth relative to peers1,2,3 45% 37% 36% 32% 7% JPMC Peer 1 Peer 2 Peer 3 Industry Wallet Firmwide Treasury Services revenue growth1 2015 2019 CIB Treasury Services CB Treasury .
The JPMorgan Chase U.S. Benefits Program is available to most employees on a U.S. payroll who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program.
The JPMorgan Chase U.S. Benefits Program generally is available to most employees on a U.S. payroll who are regularly scheduled to work 20 hours or more a week and who are employed by JPMorgan Chase & Co. or one of its subsidiaries to the extent that such subsidiary has adopted the JPMorgan Chase U.S. Benefits Program.
Paymentech, LLC, Chase Paymentech Solutions, LLC and Chase Paymentech Europe Limited, respectively trading as Chase, Chase Paymentech and J.P. Morgan are subsidiaries of JPMorgan Chase & Co. (JPMC). Chase Paymentech Europe Limited is regulated by the Central Bank of Ireland. Registered Office: JP Morgan House, 1 George's Dock, I.F.S.C., Dublin
Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. JPMS, CIA and JPMorgan Chase Bank, N.A. are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states. INVESTMENT AND INSURANCE PRODUCTS:
Merchant services are provided by Paymentech, LLC ("Chase"), a subsidiary of JPMorgan Chase Bank, N.A. 2020 JPMorgan Chase & Co. 134137 20-1421 0620. 2 1. Charge the Reader . Chase Mobile Checkout app, not the device's system settings. If you see the Moby reader 1 listed in the iOS Bluetooth Settings, you
To the prospectus dated April 15, 2016 Registration Statement Nos. 333-209682 and 333-209682-01 Dated April 15, 2016 Rule 424(b)(2) JPMORGAN CHASE & CO. Global Medium-Term Notes, Series E Global Warrants, Series E Global Units, Series E JPMORGAN CHASE
JPMorgan Chase Software Engineering Virtual Experience Using Repl.it, an in browser code editor and compiler to do the JPMorgan Chase program Module 1 - Interface with a stock p
benefits, as well as your JPMorgan Chase 401(k) Savings Plan and Retirement Plan (if applicable) benefits. Go to . My Health Online Beneficiary Designation Site. . For 2022, there are no major changes in the types of services covered under the JPMorgan Chase Medical Plan with Aetna and Cigna or the Prescription Drug Plan with CVS Caremark.
