Firm Overview - JPMorgan Chase

FIRM OVERVIEW

Marianne Lake, Chief Financial Officer

February 28, 2017

Strong fundamentals and execution JPMorgan Chase overview

1

Building exceptional client franchises

 Four leading client franchises – together delivering significant value  Client focus and long-term approach – consistently investing and

innovating  Strong foundation – capital, liquidity, balance sheet, risk discipline

2 Operating with fortress principles

 Better, faster, simpler  Commitment to controls and culture

3

Maximizing long-term shareholder value

 Delivering strong capital returns – while adapting capital and liquidity

frameworks  Delivering significant operating leverage – while investing through-the-cycle

FIRM OVERVIEW

Leading to

~15% ROTCE

11%+ CET1 ratio

55%+/Overhead ratio

1

55-75% Net payout ratio

2016 results – strong financial performance on an absolute basis… JPMorgan Chase overview

 Diversification supporting revenue, despite low rates and macro

Revenue1

$99B

volatility  Net interest income of $47B and noninterest revenue of $52B

Adjusted expense2

$56.1B 57% $24.7B

Net income

 1% decrease in the adjusted overhead ratio  Modest legal benefit

 Record net income and record EPS – record 6 out of the past 7 years

FIRM OVERVIEW

$6.19

CET15

12.2%

Capital return

$15B

ROTCE3

13%

 Increased CET1 by 60bps while returning $15B of net capital to

shareholders  65% net payout ratio in 2016

 Significant shareholder value added – among best in class returns

2 Note: For footnoted information, refer to slide 37

… and on a relative basis – JPM continues to be a leader JPMorgan Chase overview FY2016 Managed revenue1 ($B) JPM

$99

WFC

$90

BAC

$85

C GS MS

$71 $31 $35

2016 Net Income

FY2016 Overhead ratio1,2

$25

JPM

56%

JPM

$22

WFC

59%

WFC

$18

BAC

$15

C

$7

GS

$6

MS

FY2016 ROTCE4

10-year CAGR

FY2016 EPS YoY growth

65% 58%

4%

3%

5%

(3)%

BAC

15%

(11)% (20)%3

C (13)%

66% 74%

FY2016 Net capital distribution ($B)

GS MS

34% (2)% 1%

(8)%

FY2016 TBVPS7 YoY growth

SVA5,6

JPM

WFC BAC C

FIRM OVERVIEW

GS MS

JPM

13%

WFC

14% 10% 8% 10% 9%

$15

(– )

BAC

(– )

C

(– )

GS

(– )

MS

$13 $8

$5

C GS MS


WFC

7% 4%

BAC

$11 $7

JPM

9% 7% 7% 6%

Sustained tangible book value growth JPMorgan Chase overview Tangible book value per share (“TBVPS”)1,2 5-year average value creation 9% 7.6%

TCE

3.4%

+/-

1.3%

7% YoY growth Repurchases Dividends

Multiple Expansion / (Contraction)

$51.44

8% 3Y CAGR 9% 5Y CAGR

$48.13 $44.60

$38.68

$40.72

$33.62 $30.12 11% 10Y CAGR

$27.09 $21.96

$22.52

2007

2008

$18.88

FIRM OVERVIEW

2006

2009

2010

2011

2012

2013

2014

2015

Cumulative net capital return ($B) 2006-2016

TBVPS and dividends are building blocks of value creation 1

4

Refer to note 3 on slide 37 has been revised to reflect the adoption of new accounting guidance for investments in affordable housing projects

2 2010-2014

2016

$57B

Our operating model is centered around our clients JPMorgan Chase overview

Operating model

Client segmentation Wholesale

Stable performance

Individuals

Deepening client relationships

Corporate Client Banking

Middle Market Banking $20-500mm revenue

$500mm-2B revenue

Optimization

against constraints

Business Banking

Share gains

CB

$2B revenue

CIB

>80% of Fortune 500 companies

Consumer

Fortress principles

AWM1

Diversified businesses

Affluent/High net worth

Institutional investors

Ultra high net worth

FIRM OVERVIEW

Scale and efficiency

Cannot be replicated – complete, global, diversified and at scale – built over decades

1

Asset & Wealth Management (formerly Asset Management or “AM”)

5

Disciplined resource allocation and granular performance measurement JPMorgan Chase overview Sub-LOB pro-forma ROE (2016 NIAC1, 2017 equity) and shareholder value add dollars2 40%

Legend Color

LOB CCB

30%

CIB CB AWM Bubble size – SVA $ Empty bubble – neg SVA

Balance sheet growth 3

20%

10%

-

(10%)

(20%)

Below ke

(30%) -

Positive SVA 5%

10%

15%

20%

25%

FIRM OVERVIEW

ROE

Majority of our sub-LOBs clear their cost of equity

1 Net

6

income applicable to common equity (“NIAC”) Corporate 3 Annualized asset growth from 4Q14-4Q16 with the exception of Consumer Banking which is deposit growth 2 Excludes

30%

>30% 35%

Benefits of a diversified platform on returns and in stress JPMorgan Chase overview 2016 ROA1

2016 Return on RWA1

5-year avg. 116 bps

WFC

100 bps

JPM

137 bps

JPM

166 bps

150 bps

91 bps

WFC

163 bps

163 bps

GS

84 bps

82 bps

MS

C

82 bps

66 bps

GS

BAC

82 bps

50 bps

C

50 bps

BAC

75 bps

MS

(350 bps)

FIRM OVERVIEW

GS

139 bps

129 bps

101 bps

124 bps

73 bps

116 bps

(370 bps) (390 bps)

(18.2%)

MS

87 bps

156 bps

2016 DFAST CET1 launch to trough change3

2016 DFAST market shock as % of market risk RWA2

(17.5%)

5-year avg.

(520 bps) (610 bps)

(22.5%)

(23.0%)

(23.4%)

C

JPM

BAC

(26.3%) WFC

BAC

7

JPM

WFC

GS

C

(730 bps) MS

Peer disclosures in SEC filings and SNL Financial; Based on fully phased-in risk-weighted assets (“RWA”), where available, subject to Collins Floor FRB 2016 DFAST disclosure, Pillar 3 Report – 4Q15 market RWA 3 Source: FRB 2016 DFAST disclosure – represents launch to trough CET1 depletion from FRB-provided results; does not represent estimates of the stress capital buffer (“SCB”)

1 Source:

2 Source:

Agenda 1


2

3

Operating with fortress principles


Capital and liquidity Operating leverage and financial simulation

FIRM OVERVIEW

Leading to

~15%

11%+

55%+/-

55-75%

ROTCE

CET1 ratio

Overhead ratio

Net payout ratio

8

1 Leading client franchises Building exceptional client franchises

Client franchises built over the long-term

1

CCB

CIB

Deposits market share # of top 50 Chase markets where we are #1 ( top 3) Average deposits growth rate Active mobile customers growth rate Credit card sales market share2 Merchant processing volume3 ($B) Global IB fees 4 Market share 4 Total Markets revenue5 Market share 5 FICC5 Market share 5 Equities 5 Market share 5 # of MSAs with Middle Market banking presence6

CB

Multifamily lending7 Gross investment banking revenue ($B) % of North America IB fees

FIRM OVERVIEW

AWM

Mutual funds with a 4/5 star rating8 Ranking of LT client asset flows 9 Active AUM market share 10 North America Private Bank (Euromoney) Client assets market share 11

2006

2015

2016

3.6% 11 (25) 8% n/m 15.9% $661

7.9% 12 (40) 9% 20% 21.1% $949

8.3% (38) 1414(38) 10% 16% 21.5% $1,063

#2 8.7% #8 6.3% #7 7.0% #8 5.0%

#1 7.9% #1 9.7% #1 10.3% #3 8.8%

#1 8.1% #1 11.4% #1 12.0% #2 10.1%

26

45

47

#28

#1

#1

$0.7

$2.2

$2.3

16%

36%

40%

119 n/a 1.8% #1 3.0%

214 #4 2.6% #1 4.4%

220 #2 2.5% #1 4.4%


 Relationships with ~50% of U.S. households  Industry leading deposit growth12  #1 U.S. credit card issuer13  #1 U.S. co-brand credit card issuer14  #1 rated mobile banking app15  #1 U.S. credit and debit payments volume16  #2 merchant acquirer17  >80% of Fortune 500 companies do business with us  #1 in both North America & EMEA IB fees18  #1 in Global Debt, Equity & Equity-related18  #1 in Global Long-Term Debt & Loan Syndications18  #1 FICC productivity19  Top 3 Custodian globally with AUC of $20.5T20  #1 in USD clearing volumes with 19% share in 201621  Unparalleled platform capabilities – competitive advantage  #1 in perceived customer satisfaction22  Top 3 in overall middle market, large middle market and

asset-based lending bookrunner23  Industry-leading credit performance – 5th straight year of net recoveries or single digit NCO rate  83% of 10-year LT mutual fund AUM in top 2 quartiles24  Positive client asset flows every year since 2004  #2 Global Private Bank & #1 LatAm Private Bank25  Revenue and LT AUM growth ~80% since 2006  Doubled WM client assets (1.6x industry rate) since 200610

1 Proven best-in-class long-term performance Building exceptional client franchises Deposits: 5-year CAGR3

EOP core loans1: 5-year CAGR2 9%

~7% excluding non-op reduction4

8% 6%

5%

Total EOP 7%

5%

8% 6%

6% 4%

4%

4%

3%

Retail

10%

5%

4%

2%

1% JPM JPM

WFC

PNC

USB

BAC

C

2016 YoY growth Total 7% Retail 11%

2016 YoY growth 15% avg.

10%

10%

2%

5%

6%

4%

Markets revenue & IB fees ($B): Cumulative 5-years6 Markets revenue

WFC

BAC

7% 7%

5% 8%

USB

11% 5%

C

PNC

2% 2%

3% 4%

5

LT net client asset flows ($B): Cumulative 5-years $628

IB fees

$131

$408 $96

FIRM OVERVIEW

JPM

2016 Share Markets 7 IB Fees 8

11% 8%

Peer 1

8% 7%

$87

Peer 2

8% 5%

$86

Peer 3

7% 6%

$246

$75

$220 $217

$172

$148

Peer 4

7% 6%

2016

10 Note: Numbers may not sum due to rounding. For footnoted information, refer to slide 40

BLK

JPM

$181

$52

9

10

GS

UBS

MS

BK

CS

$42

$20

$41

($14)

$34

($337) Allianz10,11 ($25)

1 Proven best-in-class long-term performance (cont’d) Building exceptional client franchises J.D. Power customer satisfaction score: 2011–20161 Chase Chase

IndustryAverage Average Industry

RegionalBanks Banks Regional

MidsizeBanks Banks Midsize

Credit card sales: 5-year CAGR2 15%

BigBanks Banks Big

10%

9% 5% 4%

3

2011

2012

2013

2014

2015

2016

Digital and mobile customer growth – 2016 YoY7

4

COF

JPM

C

2016 ($B) Sales $230 4Q16 YoY6 10%

$545 14%

$251 6%

AXP $550 9%

5

DFS $121 3%

3%

BAC $226 4%

Merchant processing bankcard volumes growth8

+12%

5mm

44%

Chase

+16% +21%

4mm

+16% +7%

3mm +4%

Industry

110%

3mm

2mm

1mm

Digital

Mobile

Digital

FIRM OVERVIEW

JPM

2010 2011 2010 2011 2016 Customers (mm) Digital 44 Mobile 27

Mobile

WFC 2012 2012 27 20

Digital

Mobile

BAC

2013 2013

2014 2014 2010 Chase bankcard 2015 volumes

34 22


2010 Industry bankcard2015 volumes

Agenda 1


2

3




FIRM OVERVIEW

Leading to

~15%

11%+

55%+/-

55-75%

ROTCE

CET1 ratio

Overhead ratio

Net payout ratio

12

2 Fortress balance sheet Operating with fortress principles EOP assets ($B), except where noted Wholesale

∆

Consumer

$139

~$2.6T $2.5T

$2.35T Cash1 $361

$29

Securities $291

($2)

Secured Financing $311 Trading assets 2 $344

$15 $28

3

$57

Loans $824

Other $174

4

$11

Cash $390

YoY Avg loan growth (%) 10%

Securities $289 Secured Financing $326 Trading assets $372

Non-core

(17)%

AWM

5%

CB

14%

CIB

12% Core 15%

Loans $881

CCB

20%

Other $185

2016 2016

Goodwill $47

Goodwill $47

2015

2016

2016

FIRM OVERVIEW

EOP total deposits 5

Loans-to-deposits

$1,280

$95

2017

$1,375

~$1.5T

65%

~65%

65%

Continue to grow the balance sheet on strong loan growth funded by deposits Expect 2017 YoY average core loan growth of ~10% 13 Note: Numbers may not sum due to rounding. For footnoted information, refer to slide 42

2 Credit – net charge-offs Operating with fortress principles NCO rates at cyclical lows ($B)

Commentary

2016 Investor Day 1 NCOs +/-

Actual NCOs

Medium-term guidance NCOs +/-

2017 NCOs

Mortgage Banking 2

0.15%

0.10%

Card

2.50%

2.63%

Auto

0.45%

0.45%

0.50%

Business Banking

0.70%

0.61%

0.60%

CIB

Total CIB

0.15%

0.15%

< 0.10%

CB

Total CB

0.15%

0.09%

0.15%

< 0.10%

0.01%

< 0.10%

≤ $4.75

$4.7

0.10% < 3.00%

3-3.25%

CCB

 Expect 2017 and medium-term NCO

rates to remain relatively flat across businesses with the exception of Card and CIB  Card – seasoning of newer origination

vintages will drive loss rates modestly higher, but at higher risk adjusted margins  CIB – down due to absence of energy

related charge-offs  2017 Firmwide NCOs of $5B +/- driven by AWM

Total AWM

Firmwide

loan growth

$5 +/-

Historical and expected Card NCO rates and average loans by acquisition vintage Accounts acquired pre-2015

4.00%

Accounts acquired 2015 onwards3

Total weighted average

3.00%

FIRM OVERVIEW

2.00%

1.00% 2016

2017

2018

2019

~30%

~40%

~45%

% of average loans for 2015 onwards vintages

~15%

14 1 Disclosed

at 2016 Investor Day 2 Excludes the impact of purchased credit-impaired (“PCI”) loans. Refer to note 4 on slide 37 3 A portion of these vintages are still maturing

2 Credit – reserves Operating with fortress principles

2016 Credit reserves ($B)

Firmwide $14.9

Consumer $9.3

A

Consumer ex-PCI $6.9

Wholesale $5.6

PCI1 $2.3

Wholesale ex-energy2 $4.1

Commentary

Energy2 $1.5

2017 Outlook

A PCI1

 Consumer  Expect reserve build of ~$300mm – growth across

 Potential for further modest reserve release

businesses offset by mortgage release

B Energy2

 Wholesale

 Stable with no broad based deterioration expected

 Expect modest reserve build across wholesale ex-energy2

 Expect modest NCO (name specific) FIRM OVERVIEW

B

 Potential reserve releases in 2H17-2019

Credit fundamentals remain strong across businesses and medium-term outlook remains relatively benign 15 Note: Numbers may not sum due to rounding 1 Purchased credit-impaired 2 Energy includes Oil & Gas, Natural Gas Pipelines, and Metals & Mining

2 Credit – Commercial Real Estate (“CRE”) and Auto Operating with fortress principles CRE credit exposure1 growth ($B) Multifamily

CAGR Multifamily 16% Other 13%

Commentary  Multifamily $80B

Other

 98% secured; 82% IG3

$1402 15% CAGR

 Largest and fastest growing part of the portfolio

$121

 Predominantly to class B/C properties in supply-constrained

$108

markets  61% concentration in California  Other CRE $59B  63% secured; 67% IG3  Office (~30%), retail (~20%), lodging and industrial (~15%)  Unsecured exposure – primarily structured with availability restrictions based on advance rates against unencumbered assets  Reduced exposure to sectors and markets that contributed significantly to charge-offs during the last cycle

$59

$88 $70

79% drawn

$49

$78

$48

83% secured

$37

$32

$34

76% IG3

$37

$44

$52

2011

2012

2013

$60

2014

$72

$80

2015

2016

Auto portfolio average loan balances4 ($B) CAGR Retail Auto DCS

Retail Auto

Commentary  Business focus on profit over growth

Dealer Commercial Services (DCS)

 Leases – only offered for our manufacturing partners

4% 16%

6% CAGR

 Risk sharing arrangements with partners – conservatively

$63.6

$48.4

$50.7

$53.0

$47.0 $6.0

$7.7

$8.8

$9.3

$56.5

reserved  30+ Delinquency rates – well below the industry

$12.5 $10.1

 4Q16: Chase – 1.49%5 vs. Industry – 3.50%

FIRM OVERVIEW

 High quality loan originations6 with limited layered risk7 $41.1

$40.7

$41.9

$43.7

$46.3

$51.1

 Average term: Chase – 65 months vs. Industry – 68 months  Average FICO: Chase – 754 vs. Industry – 719  Average LTV: Chase – 94% vs. Industry – 103%

2011 2012 Average Leases ($B) $4.1 $4.5

2013

2014

2015

2016

$5.1

$6.1

$7.8

$11.0

CAGR

 Layered risk: Chase – 1% vs. Industry – 5%

22% 16

Note: Numbers may not sum due to rounding. For footnoted information, refer to slide 43

 Negative equity: Chase – 18% vs. Industry – 33%

Agenda 1


2

3




FIRM OVERVIEW

Leading to

~15%

11%+

55%+/-

55-75%

ROTCE

CET1 ratio

Overhead ratio

Net payout ratio

17

3 Continue to operate from a position of strength Maximizing long-term shareholder value 2015 10.2% CET11,2

11.6%

+60bps

12.2%

Firm SLR2

6.5%



6.5%

Total assets

$2.4T



$2.5T

RWA1,2 Std. / Adv.

$1.5T



$1.5T

GSIB3

3.5%



3.5%

TLAC

$20B +/-

Ext.4

FIRM OVERVIEW

2016

LTD shortfall

100%



>100%

Net payout

48%

+17%

65%

Dividends per share

$1.72

+9%

$1.88


3 Capital allocation Maximizing long-term shareholder value – capital Capital allocation ($B)

2016

2017

Medium-term ROTCE target (+/-)

$51.0

$51.0

20%

Corporate & Investment Bank

64.0

70.0

14%

Commercial Banking

16.0

20.0

15%

9.0

9.0

25%

$140.0

$150.0

40.0

35.0

~ $180.0

~ $185.0

42.0

47.0

Average retained equity1

Consumer & Community Banking

Asset & Wealth Management Total LOBs Corporate2 Total Firm3 Corporate goodwill 4

15%

Allocation methodology5

Overview  Moved to multi-variable framework reflecting size and stress-related constraints

2016

2017+

Advanced RWA

Leverage Stress GSIB Standardized RWA

 Consistent with existing optimization process

FIRM OVERVIEW

 All businesses held to 11% target against new framework

Advanced RWA

Capital allocations and methodology enhanced to further reflect multiple constraints of the Firm Note: For footnoted information, refer to slide 45

19

3 Capital management framework Maximizing long-term shareholder value – capital Approach to capital management

11%

Management buffer

11%+ CET1