2 0 0 9 1 5 , J A N U A R Y R E S U L T S F I N A N C I A L 4Q08
FY08 Managed Results 1 $ in millions $ in millions $ O/ (U) O/ (U) % FY2008 FY2007 FY2007 1 Result s excl. Merger-relat ed it ems 2 $73,402 ($1,410) (2)% Revenue (FTE) 2 22,647 13,403 145% Credit Cost s 3 42,915 1,212 3% Expense Merger-relat ed it ems (aft er-t ax) (211) (211) NM Report ed Net Income $5,605 ($9,760) (64)% Report ed EPS $1.37 ($3.01) (69)% 4 4% 13% ROE 4 6% 21% ROE Net of GW 4,5 7% 23% ROTCE R E S U L T S 1 Merger-related items include the Bear Stearns and WaMu transactions 2 Managed basis presents revenue and credit costs without the effect of credit card securitizations. Revenue is on a fully taxable-equivalent (FTE) basis. All references to credit costs refer to managed provision for credit losses 3 Includes pretax merger-related costs of $209mm in 2007 4 Actual numbers for all periods, not over/ under 5 See note 1 on slide 24 F I N A N C I A L 1
4Q08 Managed Results 1 $ in millions $ in millions $ O/ (U) O/ (U) % 4Q08 3Q08 4Q07 3Q08 4Q07 1 Result s excl. Merger-relat ed it ems 2 $19,322 $3,237 $1,047 20% 6% Revenue (FTE) 2 8,583 3,899 5,422 83% 172% Credit Cost s 3 11,007 27 287 - 3% Expense Merger-relat ed it ems (aft er-t ax) 1,064 1,799 1,064 NM NM Report ed Net Income $702 $175 ($2,269) 33% (76)% Report ed EPS $0.07 ($0.04) ($0.79) (36)% (92)% 4 1% 1% 10% ROE 4 1% 2% 15% ROE Net of GW 4,5 3% 3% 17% ROTCE 1 Merger-related items include the Bear Stearns and WaMu transactions 2 Managed basis presents revenue and credit costs without the effect of credit card securitizations. Revenue is on a fully taxable-equivalent (FTE) basis. All R E S U L T S references to credit costs refer to managed provision for credit losses 3 Includes pretax merger-related costs of $22mm in 4Q07 4 Actual numbers for all periods, not over/ under 5 See note 1 on slide 24 F I N A N C I A L 2
4Q08 Significant Items $ in billions (excluding EPS) $ in billions (excluding EPS) Net Income EPS LOB Increase t o credit reserves ($2.5) ($0.66) Firm 1 (1.8) (0.49) IB Net markdowns on leveraged lending & mort gage exposure Merger-relat ed it ems 1.1 0.28 Corporat e MSR risk management result s 0.9 0.23 RFS Privat e Equit y writ e-downs (0.7) (0.18) Corporat e Payment ech gain on sale 0.6 0.17 Corporat e 1 Figures are not IB comp adj usted R E S U L T S F I N A N C I A L 3
Investment Bank � Net loss of $2.4B includes the following significant items: $ in millions $ in millions $ O/ (U) S ignificant item ($ in billions) Business line Revenue / Pret ax Leveraged lending markdowns FI Mkts. ($1.8) Mortgage-related markdowns FI Mkts. ($1.1) 4Q08 3Q08 4Q07 Credit costs NA ($0.8) Revenue ($302) ($4,337) ($3,474) Impact of spread tightening on structured liab. 1 FI & Equity Mkts. ($0.7) Invest ment Banking Fees 1,373 (220) (284) Total pretax impact ($4.4) Total net income impact ($2.7) Fixed Income Market s (1,671) (2,486) (2,286) 1 Fixed Income Markets of ($367mm) and Equity Markets of ($354mm) Equit y Market s (94) (1,744) (672) Note: Items are not IB comp adj usted Credit Port folio 90 113 (232) � IB fees of $1.4B down 17% YoY Credit Cost s 765 531 565 Expense 2,741 (1,075) (270) � Fixed Income Markets revenue of ($1.7B); net of significant items, Net Income ($2,364) ($3,246) ($2,488) revenue of $1.6B, reflecting: Key St at ist ics 1 � Weak trading result s in credit-related product s, largely offset by record performance in rates and currencies and strong Overhead Rat io NM 95% 95% performance in commodities and emerging markets Comp/ Revenue NM 54% 49% � Equity Markets revenue of ($94mm); net of significant items, ALL / Tot al Loans 4.71% 3.85% 1.93% revenue of $260mm reflecting: NPLs ($mm) $1,175 $436 $353 � Weak trading result s, partially offset by strong client revenue 2 ROE (28)% 13% 2% across product s, including prime services VAR ($mm) 3 $327 $218 $123 R E S U L T S � Credit Portfolio revenue of $90mm down $232mm YoY EOP Equit y ($B) $33.0 $33.0 $21.0 1 Actual numbers for all periods, not over/ under � Credit cost s of $765mm were driven by increased allowance 2 Calculated based on average equity. 4Q08 average equity was $33.0B reflecting a weakening credit environment 3 Average Trading and Credit Portfolio VAR � Expense down 9% F I N A N C I A L YoY driven by lower compensation expense, largely offset by higher non-compensation expense relating to the Bear S tearns merger 4
IB League Tables and Awards League Table Results � Continue to rank #1 in three capital raising league League Table Results tables for 2008 1 Thomson Volumes 1 � Global Debt, Equity & Equity-related 2008 2007 � Global Equity & Equity-related � Global Loan S yndications Rank Share Rank Share � Ranked #1 in Global Fees for 2008 5 with 8.8% Global M&A Announced 2 #2 26.5% #4 26.8% market share; for 2007 5 , JPM was #1, with 8.4% Global Debt, Equity & Equity-related #1 9.7% #2 7.6% market share US Debt, Equit y & Equit y-relat ed #1 15.5% #2 10.0% Major Awards Major Awards Global Equity & Equity-related 3 #1 11.8% #2 9.2% Bank of the Year Global Converts #1 13.4% #1 14.8% International Financing Review December 2008 Global Long-term Debt 4 #2 8.8% #3 7.1% Global Investment Grade Debt #2 6.8% #3 6.8% Bank Risk Manager of the Year Derivatives House of the Year Global High Yield Debt #1 20.4% #1 12.1% Risk , January 2009 US High Yield Debt #1 20.8% #1 13.5% Best Overall Investment Bank R E S U L T S Institutional Investor , December 2007 Global ABS (ex CDOs) #1 14.8% #2 8.6% Global Loan Syndications #1 11.5% #1 12.8% European Investment Bank of the Year 1 Source: Thomson Reuters. 2007 represents heritage JPM only 2 Global M&A market share and ranking for 2007 includes transactions withdrawn since 12/ 31/ 07 Financial News , December 2008 F I N A N C I A L 3 Global Equity & Equity-related includes rights offerings 4 Global Long-term Debt includes ABS, MBS and municipal securities 5 Source: Dealogic Note: Rankings as of 12/ 31/ 08 for full year 2008 and full year 2007 5
Leveraged Lending � Markdowns of $1.8B, net of hedges, on remaining legacy commitments � $12.6B of legacy commitments with gross markdowns of $5.7B, or 45% ; market value at 12/ 31/ 08 of $6.9B � $12.9B of legacy commitments at 9/ 30/ 08 � ($0.3B) reduction, or 2% of exposure � $12.6B of legacy commitments at 12/ 31/ 08 classified as held-for-sale � Valuations are deal specific and result in a wide range of pricing levels; markdowns represent best indication of prices at 12/ 31/ 08 R E S U L T S F I N A N C I A L Note: Exposures are stated on a trade date basis. $9.3B total commitments at 12/ 31/ 08 classified as held-for-investment 6
IB Key Risk Exposures Mortgage-related $ in billions $ in billions Exposure as of Exposure Exposure as of 9/ 30/ 2008 reduction 12/ 31/ 2008 Prime $2.3 ($0.5) $1.8 Alt-A 5.8 ($1.5) 4.3 Subprime 1.2 (0.3) 0.9 Subtotal Residential $9.3 ($2.3) $7.0 Commercial 9.3 (1.6) 7.7 Mortgage Exposure $18.6 ($3.9) $14.7 � 4Q08 reductions of over 20% on mortgage-related exposures � $1.1B of net markdowns, largely driven by commercial � Prime / Alt-A exposure of $6.1B, difficult to hedge effectively � Prime - securities of $1.7B, mostly senior securities, and $0.1B of loans R E S U L T S � Alt-A - securities of $1.4B, mostly senior securities, and $2.9B of first lien mortgages � S ubprime exposure of $0.9B, actively hedged � Commercial exposure of $7.7B, actively hedged F I N A N C I A L � S ecurities of $2.7B, of which 55% are AAA-rated; 18% / 82% fixed vs. floating-rate securities � $5.0B of loans, primarily first lien mortgages 7
LOB Results Include WaMu Operating Results Segment Disclosures Enhanced as Shown Below Retail Financial Services Card Services Commercial Bank Retail Financial Services Card Services Commercial Bank Prior Reporting Segments Regional Banking Mortgage Banking Auto Finance � Consumer and � Mortgage � Auto Business Banking production originations (including Business � Mortgage � Auto loan and Banking loans) servicing lease balances � Other loan portfolios � Admin/ Other � WaMu Card � WaMu Commercial Retail Banking Consumer Lending business added Bank business Restated Reporting Segments � Consumer and � Loan originations and balances (including added � S upplement Business Banking home lending, education, auto and other � New client disclosure (including Business loans) enhanced with key segment, Banking loans) � Mortgage production and servicing statistics on WaMu “ Commercial Term R E S U L T S � WaMu Consumer card portfolio Lending” ; includes � WaMu Home Lending business WaMu multi-family and Business (originat ions, servicing, and port f olio) and commercial Banking added mortgage loans � Chase prime mortgages previously reported F I N A N C I A L in Corporate/ Treasury moved into Consumer Lending Note: Historical data for all segment disclosures have been reclassified to conform to current presentation; WaMu EOP balance sheet items have been reclassified for 3Q08 only to conform to current presentation (operating results for WaMu’ s banking operations did not have a material effect 8 on results in 3Q08)
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