JPMorgan Chase

1
JPMorgan Chase

• By
• Brianne Lavin, George Greco, Lesly Ayala,
• Justin Verzosa, Angela De Lorenzo,
• Erick Muse Salem Salem

2
Company Research Analysis

• Brianne Lavin
• George Greco
• Erick Muse

3
Mission Statement

• Our company was built with hard work over 200
  years. We would like to create a company that all
  can be proud of, and we are confident that,
  working together, we will built the best
  financial services company in the world.

4
17 in Fortune 500

• Company Type Public (NYSE JPM)
• Fiscal Year-End December
• 2005 Sales (mil.) 79,902.0
• 1-Year Sales Growth 40.3
• 2005 Net Income (mil.) 8,483.0
• 1-Year Net Income Growth 89.9
• 2005 Employees 168,847
• 1-Year Employee Growth 4.9
• Rankings
• 17 in FORTUNE 500
• SP 500
• Dow Jones Industrials
• Dow Jones Global Titans
• 22 in FT Global 500

5
Quick Overview

• JPMorgan Chase was formed in 2001 when Chase
  Manhattan and J.P Morgan merged
• 2004 JPMorgan Chase Acquired BANK ONE for 60
  Billion worth of stock.
• JPMorgan Chase and Co. is now the third-largest
  financial services firm in the U.S.
• JPMorgan is now diversified in 50 different
  countries.

6
Key People

• Chairman William B. (Bill) Harrison Jr.
• President, CEO, and Director James (Jamie) Dimon
• CFO Michael J. Cavanaugh
• CIO Austin A. Adams
• Head, Strategy and Business Development Jay
  Mandelbaum

7
Top Competitors

• Bank of America
• 12 in Fortune 500
• Citigroup
• 8 in Fortune 500
• Merrill Lynch
• 34 in Fortune 500

• Bank of America
• Citigroup
• Merrill Lynch
• ABN AMRO
• HSBC USA
• ING Direct USA
• American Express
• Bank of New York
• Bear Stearns
• CIBC
• Capital One
• Citigroup Global Markets
• Credit Suisse (USA)
• Deutsche Bank
• Goldman Sachs
• HSBC Finance
• HSBC Holdings
• Lehman Brothers
• Morgan Stanley

8
What does JPMORGAN offer the customers?

• gt Asset Wealth Management
• gt International Banking 
• gt Business Credit
• gt Investment Banking
• gt Chase Commercial Online
• gt Commercial Real Estate Banking
• gt Online Solutions  
• gt Credit Products
• gt Securities Safekeeping 
• gt Equipment Leasing
• gt Trade Solutions 
• gt Global and Regional Capabilities
• gt Treasury Services  
• gt Institutional Asset Management
• gt Worldwide Securities Services

9
Sales coverage

• Operates in more than 50 countries around the
  world
• Active domestically in the United States.
• Consist of 2,600 locations across 17 states.

10
Annual Cash Flow Statement

• 
  Dec 05 Dec 04 Dec 03
• Net Operating Cash Flow 30,236.0
  21,805.0 14,601.0
• Net Investment Cash Flow 12,944.0
  23,076.0 12,418.0
• Net Financing Cash Flow 45,069.0
  59,596.0 26,251.0
• Net Change In Cash 1,502.0
  14,900.0 1,050.0
• Depreciation and Amortization 4,318.0
  3,835.0 3,101.0
• Cash Dividends Paid 4,878.0
  3,927.0 2,865.0
• In Millions

11
Annual Income Statements

• Year Revenue Gross Profit
  Income Total Net Income
• Dec 05 79,902.0 10,295.0
  27,289.0 8,483.0
• Dec 04 56,931.0 4,600.0
  15,428.0 4,466.0
• Dec 03 44,363.0 0.0
  21,135.0 6,719.0

12
Subsidiaries/Affiliates

• Chase Paymentech Solutions LLC
• JPMorgan Asset Management Holdings Inc.
• JPMorgan Private Banking
• JPMorgan Chase Vastera
• JPMorgan Securities Inc.
• JPMorgan Worldwide Securities Services
• Neovest Inc.

13

• Dedication
• Despite their powerhouse growth, they remain
  committed to the success of the individual
  companies they serve. But thats not all. They
  also remain dedicated to the local communities
  where they do business. From charitable giving to
  employee volunteerism, from underwriting
  community projects to expanding services, their
  strong support of local communities will continue
  to grow.

14
Friendly

• Chase Commercial Banking continues to believe in
  local decision-making, local delivery, and local
  service. This ensures that, no matter how much
  they grow, theyll continue to make their
  decisions where you live, work, and do business.

15
Industry Analysis

• Angela De Lorenzo
• Lesly Ayala
• Justin Verzosa
• Salem Salem

16
Total Market Size

• Consumers
• Small businesses
• Commercial Banking
• Corporate businesses
• International Businesses
• 90 million consumers nationwide

17
The Market Broken Down

• Investment Banking
• Retail Financial Services
• Card Services
• Commercial Banking
• Treasury Securities Services
• Asset Wealth Management

18
Industry Structure
Distribution Key Customers

• Financial Industry
• Distribution occurs
• through e-commerce, mail and personal
  interaction.

• Key customers for the financial banking industry
  are the obvious consumers, small business and
  commercial banking.

19
Competition

• JPMorgan Chase competitors are primarily in the
  Money Center Banks industry.
• JPMorgan Chase also competes in the Online
  Banking, Private Banking, and Asset Management
  sectors.

20
Key Players

• JPMorgans main 3 competitors are
• Bank of America
• Citigroup
• Merrill Lynch

21
Bank of America

• The nation's first coast-to-coast bank
• Bank of America fattened up by purchasing
  northeastern banking behemoth FleetBoston in 2004
  for almost 50 billion.
• The second-largest bank in the US by assets
• The country's most extensive branch network, with
  more than 5,800 locations

22
Citigroup

• Another day, another dollar -- 67 million of
  them. That's approximately what Citigroup, one
  of the world's largest financial services firms,
  reaped in net profits every single day of 2005.
• The first US bank with more than 1 trillion in
  assets
• It has more than 3,000 bank branches and consumer
  finance offices in the US and Canada, plus an
  additional 1,500 locations in about 100 other
  countries.

23
Merrill Lynch

• The firm offers financial services for private,
  institutional, and government clients, including
  mutual fund, insurance, annuity, trust, and
  clearing services, besides traditional investment
  banking and brokerage.
• Lynch operates in three segments the Global
  Markets and Investment Banking Group, which
  generates more than half of its sales Global
  Private Client Group, which is its wealth
  management side and Merrill Lynch Investment
  Managers, which the firm is merging with Black
  Rock.

24
Economic Growth and Profitability

• Return on Equity 6.8
• Return on Assets 0.5
• Return on Invested Capital 3.2
• Pre-Tax Profit Margin 12.2
• Post-Tax Profit Margin 8.4
• Net Profit Margin (Total Ops) 8.4
• Debt/Equity Ratio 1.09
• Total Debt/Equity Ratio 1.4

25
Technology Trends

• The New York bank, the third largest in the
  U.S., has in fact become one of the biggest
  spenders on technology that Wall Street has ever
  seen. (businessweek.com)
• JPMorgan launched the Blink credit card, which
  lets users hold the card in front of a reader
  instead of swiping, signing, entering a PIN, or
  handing the card to a store employee.
• Approval for a home equity loan now takes two
  hours, vs. two days a few years ago.
• The investment bank is getting a 1 billion
  annual budget for technology.

26
Environmental Trends Impacting the Industry

• Economic fundamentals
• Low interest rates
• Increasing regulatory requirements
• Internet technologies
• Consolidation
• Business models

27
Globalization

• JPMorgan is a global leader in providing
  innovative products and services to the world's
  largest institutional investors and debt and
  equity issuers.
• With 11.5 trillion in assets under custody, the
  business also services 7 trillion in debt
  worldwide.

28
Globalization Continued

• In March 2006, Global Custodian announced the
  results of its Tri-Party Securities Financing
  Survey.
• JPMorgan was the only provider to be top rated in
  the Europe, North America and Global categories
  of the survey.
• Global Custodian cited JPMorgan's position as
  "the first genuinely global tri-party
  provider...winning top ratings on both sides of
  the Atlantic and in the overall category."

29
E-Business trends within the industry

• IBM outsourced
• to automate the creation statement of position
  statements on demand for any particular customer
  account
• Online Banking

30
Thank You

• Any Questions?