6 Consumer Business Baasdasdsanking Investor Day FINAL

7/24/2019 6 Consumer Business Baasdasdsanking Investor Day FINAL

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February 28, 2012

C O N S U M E R & B U S I N E S S B A N K I N G

Todd Maclin, Chief Executive Officer Consumer & Business Banking


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Consumer & Business Banking is a strong franchise today

Great business with a focus on growth

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Strong profitability, despite the environment2011 net income of $3.8B and ROE of 40%

Low volatility in earnings

Significant opportunities to lower cost to serve and increase revenues3-5 year horizon

Brand strength, driven by excellent products, services and convenient channels

#3 in U.S1: over 5,500 branches and over 17,200 ATMs across 23 states serving 23mm households

Over 17mm active online customers

Over 8mm active online mobile customers, over 50% YoY growth

Significant presence and leadership in key deposit markets

Competitive position of strength: our customers, our people and our financial capacity

Investment consistency: we are growing and deepening relationships

Over 27,000 personal and business bankers and 3,200 financial advisors

Branch and ATM build-out to capture growth at low risk ROIs

Significant mobile and internet investment

Technology to lower cost-to-serve and delight customers Across One Chase, ~51mm households and ~63mm customers to target more aggressively

Chase.com #1 most visited banking portal in the US2

Note: all data as of December 31, 20111Based on FDIC data for retail deposits as of June 2011; deposits adjusted to exclude large branches (+$1B) assumed to contain non-retail deposits2 January 2012 compete.com rankings


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Near-term headwinds will slowOur focus on strong underlying growth will pay off

Simulated pretax income ($B)

$6.4

($0.8 )

($0.6 )

$5.5 +/-

$0.5

$1.0

$7.5 +/-

$3.0

$0.6

$12.5 +/-

2011 Pretaxincome

DurbinYoY

Low rates /flat curve

Simulated2012

Costefficiencies

Growthopportunities

Simulated2015

Growthopportunities

Spreadnormalization

Simulated2020

Near-term headwinds Medium-term uplift Longer-term growth

$0.5: 02-11

New builds

($0.3): 12+

New builds

$0.3: Business

Banking

$0.4: ChasePrivate Client

$0.5: 02-11

New builds

$1.0: 12+

New builds

$0.7: Business

Banking

$0.6: Chase

Private Client

1 Consistent with 2012 outlook provided in 4Q11 earnings materials

1

4% underlying annual growth (net of investment) assumed

1

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h-Chase Chase incl. WaMu Revenue

'05-'09 CAGR '09-'11 CAGR YoY '11-12

Net interest income 8% 0%

Noninterest revenue 11 0

Debit 23 11

NSF-OD 15 (20)

Investment revenue 5 9Service fees and other 3 14

Total revenue 9% 0%

# of checking accounts 12% 2%

# of debit transactions 20% 17%

Regulatory reform cost the industry ~$20B1

In addition, low rates cost the industry ~$4B2

These revenues will not be replaced in the short term

Regulatory reform forces industry to significantly change business models

Regulatory reform has permanently altered the economics in CBB

Historical growth

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1Source: Boston Consulting Group2Source: Bernstein and Morgan Stanley research


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Customer predisposition and the current competitive landscape does not allow banks to be

compensated via monthly fee-based accounts

Chase has multiple paths to a checking account with no monthly service feeOver 85% of

customers qualify

Average monthly expense for common services

$7 $8

$15

$20$25

$30

$40

$50

$10 - 12

Amazon

Prime

Netflix

(streamingonly)

NY Times

online

iPad data

plan

Gym Daily coffee Cell phone Cable Chase

Note: non-banking fees captured represent the low-end product/service per category (e.g., NY Times online subscription, etc.)

Monthly service charges for banks are lower than most consumer service charges

But in this environment, do not expect them to bridge the revenue gap

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Chase delivers significant value to customers at minimal or no cost

Services not explicitly charged for

Over 5,500 branches, many with extended and Saturday hours, staffed by over

57,000 employees

24/7 phone support staffed with almost 6,000 telephone banking employees willing to

help with any query

Access to over 17,200 ATMs across the United States

Innovative transaction options

QuickPaySM and QuickDepositSM

Online bill payment

E-mail and text alerts

Over 10,700 deposit-friendly ATMs

Fraud protection

FDIC protection on deposits

Note: all data as of December 31, 2011

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Distribution of households by wealth segment

32%23%

20%

23%

21%23%

19%19%

8% 12%

United States Chase

Source: MacroMonitor 2010 Survey of U.S. Households, U.S. Census BureauChase data post-implementation of Durbin Amendment and Regulation E

1 Primary business households and primary business card-only households excluded

Segment 1(30% ofChase

householdshave >$100kin D&I andmake up~55% ofrevenue

Share of D&Iwallet at Chase

% of U.S.households with a

Chase bankingrelationship1

4% 23%

15% 18%

20% 19%

26% 21%

41% 13%

Greatest opportunity is to grow with our highest value customers

And we have a larger share of them

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0.8 1.0 1.0 1.0 1.0 1.0

0.5

0.7 0.90.9 1.0 0.70.2

0.60.7 0.7

0.8

0.5

0.2

0.5

0.6 0.5 0.4

0.4

0.2

0.30.6

0.9

0.3

Segment 1(


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74% 74% 74% 75% 77%

4.14.5 branch visits per quarter per household

Source: JPM Chase internal data

% of personal banker time by customer wealth segment1Households visiting branch quarterly by wealth1

24% 23%

25% 23%

23% 23%

18% 19%

10% 12%

PB time with client Total Chase HH

Seg.1 (


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Requirements for succeeding in the new environment

Strong reputation and customer experience

ConvenienceBranches and ATMs

Capacity to invest and innovate

Complete and best-in-class financial services offerings

Cost effective service model

Ability to adapt

Successful banks will be those which can leverage these characteristics into

a strong growth proposition

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Industry leader in key consumer attributes4Q11

A strong reputation and customer experience are keys to growth

Chase scores well relative to competitors

38%

42%44%

51%49%

16%

24%26%

34%

41%

25%

22%

30%33%

28%

Momentum Innovative Trust Products Convenience

Chase BAC WFC

Source: 4Q11 Brand Tracker in the retail footprint

Likely to recommend Chase to family, friends, co-workers(% of households who strongly agree1)

Likely to use Chase to fulfill new financial need(% of households who strongly agree1)

Source: Monthly Consumer Bank Relationship Survey (data from December 2011)1Strongly agree equals a 9 or 10 on a 10-point scale

16%21%

69%

1-3 4-8 9-10Overall Satisfaction with Chase (on a 10-pt scale)

16%23%

81%

1-3 4-8 9-10

Overall Satisfaction with Chase (on a 10-pt scale)

Attribute definitions: Momentum: Is becoming more popular Innovative: Offers innovative products and services Trust: Is a bank I trust Products/Services: Offers products and services that meet my needs Convenience: Offers more convenient branch and ATM locations

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Key areas of overall satisfaction (top 2-box scores1)

55%

60%

65%

70%

75%

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

57%

67%

62% 65%

Jan-11 Dec-11

70%

75%

Jan-11 Dec-11

Source: Chase Relationship Survey1From a scale of 1-10, customers who select a rating of 9 or 10

Overall satisfaction with Chase (top 2-box scores1)

Satisfaction with branch visits Satisfaction with products

We have made measurable customer experience improvements in the last year and

continue to have momentum

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Affluent share of D&I wallet

Variable contribution of affluent households

1% 4%

60%

0.5x1x

8x

Source: internal customer profitability analysis, September 2010August 2011 (as ofAugust)

1Checking only2 HH with Chases current penetration and size of deposit and lending relationship

3 60% of D&I; an average credit card relationship (~$15k annual spend) with every HH.and with a mortgage in one out of two HH

Reasons why affluent households want to consolidate

Source: 2008-2009 Phoenix Survey

Note: question askedWhat is the primary reason you chose to begin your

relationship with your primary investment provider?

Referralfrom atrustedsource17%Reputation

13%

Competitive

fees9%

Range ofproducts

and services9%

Stronginvestment

performance7%

Convenientlocations

5%

Other13%

Customer experience is critical to our affluent customers

57% is driven byreputation and customer

experience

Transactional

relationship1Average

relationship2Primary

relationship3

Transactional

relationship1Average

relationship2Primary

relationship3

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Service quality/relationship 27%


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Ability to adapt



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Chase lent $17B to small businesses up 52% YoY

#1 SBA lender second year in a row

Over 5,300 SBA loans

#1 SBA lender to women and minority owned

businesses in 2011

Hired over 1,200 business bankers since start of 2009

to serve small business clients

Business Banking average deposits of $65B up 11%

YoY

Ink from ChaseBest Business Rewards Credit Card2

183k cards issued, up 58%YoY

52k mobile online users of JotProduct unveiled in

2Q11

Paymentech named #1 payment systems provider of

the Top 500 internet retailers for 6thconsecutive year

by Internet Retailer

New sign-ups from branches increased ~34% YoY

Chase has best-in-class financial services and proven ability in AM and CB

Business BankingChase Wealth Management

Note: all data as of 20111 Best General Travel Credit Card by Nerd Wallet (Winter 2012), Best Airline Miles Credit Card by Credit.com (December 2011 )2Nerd Wallet (Winter 2012)

Leading investment sales force

Over 3,200 financial advisors

~$140B client investment assets

World class investment products brought to Chase

Industry leading managed account platform

Full suite of brokerage and insurance products

Access to J.P. Morgan Private Bank products for

Chase Private Clients

Fully integrated banking product offering

Online and mobile banking

Award winning Chase Sapphire card1

Chase mortgage platform

Branches are invaluable to affluent customers

Affluent households average ~4.5 branch visits

per quarter

Incremental D&I balances of $100B (3%

wallet) at 1% = $1B+/- pretax opportunity

WaMu branch productivity at Chase levels is

a $1B+/- pretax opportunity

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4k12k

22k

75k+

2010 3Q '11 4Q '11 2012 Target

16139

262

1,000+

2010 3Q '11 4Q '11 2012 Target

Added locations and bankers

Opened 246 CPC locations in 2011; total of 262

New York, Chicago, South Florida, Los Angeles

and San Francisco

500+ CPC Bankers and Advisors

Growing relationships

~22,000 clients with $70k+ avg. in incremental D&I

balance per CPC client $16B in D&I with $1.6B new money (most of the

growth where CPC has been open


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$1 $1

$82

Affluent clients in non-CPC branches

Affluent clients in CPCbranches

CPC Clients

$50$70

$330

Prior investors Banking only New investors

$1 $1

$80

Affluent clients innon-CPC branches

Affluent clients inCPC branches

CPC Clients

D&I growth/CPC HH ($k change July 11 Jan 12)D&I growth/Affluent HH ($k change July 11 Jan 12)

%CPC HHs 41% 51% 8%

Source: JPM Chase internal data

$

$50

$100

$150

$200

$250

$300

$350

Pre-CPC 2 4 6

D&I growth/CPC household ($k change)

$

$10

$20

$30

$40

$50

$60$70

$80

$90

Pre-CPC 2 4 6

D&I growth/CPC new investor households ($k change)

CPCHousehold balance growth showing early signs of success

$75k+ $325k+

Months as CPC HH Months as CPC HH1 3 5 7 1 3 5 7

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Business BankingGrowing with larger business customers

Source: JPM Chase internal data1Average deposit balance, product ownership, and revenue of top 10% of relationships by deposit balance2Commercial checking products include all analyzed checking accounts3Treasury Services includes lockbox, account transfer service, ACH initiation and block, cash vault, check payable services, payroll cards, etc.4Revenue is post-Durbin (at 22 cents per transaction) and Reg. Q

Our objective is to provide the primary operating account relationship for Business Banking customers

Commercial Banking and Treasury & Securities Services platforms allow us to deliver best-in-class

products, services and technology to small businesses

Average of all relationshipsAverage of top decile1 (based on deposit

balances)

Sales revenue $250k-$3mm $3mm+ $250k-$3mm $3mm+

Deposit ADB per relationship ($k) $65 $200 $500 $1,500

Commercial checking ownership2 9% 19% 26% 65%

Payroll Services ownership 4 4 8 12

Treasury Services ownership3 3 10 13 50

Merchant Services ownership 6 6 8 17

Revenue per relationship4

1x 3x 5x 15x

Comparison by sales revenue tier

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Number of Business Bankers

Business Banking is dramatically improving productivity in expansion markets

Loan originations per branch ($mm)

Average deposit ADB per branch ($mm)

Source: JPM Chase internal data13Q11 vs. 3Q10

1,526

427

1,732

688

1,963

923

CAGR = 13%

CAGR = 47%$13.5

$4.2

$14.0

$5.3

$15.0

$6.3

CAGR = 5%

CAGR = 22%

$0.6

$0.1

$1.0

$0.6

$1.2

$0.9

CAGR = 42%CAGR = 225%

2009 2010 2011 2009 2010 2011

2009 2010 2011 2009 2010 2011

2009 2010 20112009 2010 2011

Non-expansion Expansion markets

Non-expansion Expansion marketsNon-expansion Expansion markets

Managed to increase risk-adjusted spreads whilegaining market share

Industry loan balances contracted 5%, while

Chase Business Banking grew 4%1

Comments

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Ability to adapt



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Our branch and ATM network provides opportunity to grow

209 branches410 ATMs

113 branches

217 ATMs

22 branches

27 ATMs

933 branches

3,595 ATMs

47 branches

157 ATMs

298 branches

929 ATMs

69 branches

139 ATMs123 branches

378 ATMs

676 branches2,029 ATMs

32 branches

46 ATMs

156 branches

376 ATMs

74 branches

250 ATMs

292 branches

1,234 ATMs

233 branches

454 ATMs

50 branches

79 ATMs

785 branches

2,691 ATMs

196 branches

593 ATMs

307 branches

544 ATMs

292 branches

893 ATMs

82 branches

150 ATMs

419 branches

1,735 ATMs

68 branches

213 ATMs

31 branches

88 ATMs

Greater than 10%

Between 5% and 10%

Less than 5%

Deposit market share

1Branches and ATMs as of December 31, 2011 21CON

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Expansion markets

Filling out branch footprint in attractive growth markets

Plenty of opportunity to build profitable branches

We decision branches one at a time

We continue to build the majority of our branches in CA and FL

Once optimal network is reached, we will stop building branches

We will continue to consolidate branches where it makes sense to do so

Once build-out is complete, footprint will be hard to replicate

1Branches as of December 31, 2011

Simulated branch expansion

933 300 1,250

292 200 500

74 50 120

1,299 550 +/- 1,850 +/-

4,209 350 4,550

5,508 900 +/- 6,400 +/-

Total potential

future branches

California

Florida

Atlanta, GA

Total

All Other "Fill In and In-Footprint

Grand Total

Current branches1

Potential 2012+

new builds

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Individual branch example using through-the-cycle rates

New builds reach $1mm in pre-tax opportunity by year 10+/-

Number of years until

% medium andhigh opportunity

Cost to buildSeasoned pre-tax

opportunitybreak-even1 payback

2012 newbuildpipeline

~90% $2.5mm+/- $1.5mm 3 +/- 6 +/-

Average

branchbuilt in2002-2011

~60 2.0+/- 1.0 4 +/- 8 +/-

New build economics still support growth strategy

We have shifted new build strategy toward higher opportunity branches

We will also continue to build branches to meet our responsibilities under the Community Reinvestment

Act (CRA)

1Contribution basis which includes all of the direct branch costs (costs within the wallse.g., occupancy, salaries and benefits, technology/equip), as well as variable product costs

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Cumulative new build pretax earnings ($mm)1

~1,250 new builds between 2002 and 2011 contribute $1B+/- in 2018

Future new builds provide a significant long-term opportunity

(500)

0

500

1,000

1,500

2,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

New builds 2002-2011 Total new builds

New builds remain a $1B+ pre-tax opportunity

1

Assumes low rates through 2014, normalizing thereafter2Including 900 potential new builds

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2


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Treasury&

Securities

Services

Leveraging the retail branch platform

~30% commercial

dollars deposited

through the branch

channel

~20% of JPM IM US

Retail AUM comes

from the branches

Business unlikely to

exist without retail

presence (>16mm

branch transactions

annually by CBclients)

$0.4-$0.5B of

projected long-term

CB target net income

opportunity from

Middle Market

expansion in the

WaMu footprint

Commercial

Banking

Consumer & Business Banking

Mortgage Banking

#1 SBA lender #2 ATM network#3 in deposit market

share1#3 in branches

1FDIC data as of June 2011

Retail branches are critical to fully integrated client solutions

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Asset

ManagementCard Services &

Auto

~45% of Chase

branded cards sold

through branches

~40% of Card

Services revenue

from new merchants

sourced through the

branches

~50% of retail

mortgages

originated through

branches


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Ability to adapt



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$1.5

$1.9

$2.8

2009 2010 2011

Capacity to investBuilding the foundation for future earnings

Continue to invest even in difficult times

Even with investment spending, we have strongquality of earnings

Peers who have limited capacity or chose not toinvest will pay for it in future earnings

$7.6 $7.0 $6.8

$8.5 $8.0 $8.0

2009 2010 2011

Pre-tax pre-provision ($B)Investment cash spend ($B)

PTPP as disclosed Incremental PTPP adj. forinvestment spend

Performance metrics Comments

2009 2010 2011

Overhead reported/adjusted1 58% / 53% 60% / 53% 62% / 53%

ROE reported/adjusted1

42% / 47% 36% / 41% 40% / 47%

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Note: investment spend includes new builds, business banking expansion, new CPC locations, advertising and marketing, sales f orce adds, technology, branchsignage / interior upgrades, and ATMs

1Excludes investment spend


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Ability to adapt



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0.40.6

1.1

1.92.1

4Q07 4Q08 4Q09 4Q10 4Q11

Investments in automation have led to an increase in customer self-service

BranchAvg. quarterly visits per Consumer household1

ATMAvg. quarterly deposits per Consumer household1

CAGR = 54%

5.2 5.04.5 4.6 4.3

4Q07 4Q08 4Q09 4Q10 4Q11

CAGR = (5)%

DigitalAvg. quarterly logins per Consumer household1

15.619.7 19.2

1.6

4.69.3

4Q09 4Q10 4Q11

PC devices Mobile devices

11%

CAGR

140%

29%28.5

24.3

17.2

Teller share of deposit volume2

90% 85%74%

62%56%

4Q07 4Q08 4Q09 4Q10 4Q11

Source: JPM Chase Internal Data1

All interaction (i.e., logins, visits, deposits) per household figures include total Consumer households for the quarter (both channel active and inactive households)2Analysis includes only ATM and Teller deposits (excludes Mobile Quick Deposits)

Approximately 90% of transactions are now self-service

CAGR = (9)%

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and we are positioned to continue innovating and reducing the cost to serve

Pilots in multiple branches

Positive customer reaction (similar to

airline industry)

Testing new Self-Serve Teller (SST) technology in branches

Telepresence

Self-Serve Teller machine at the teller line

Will be able to support check cashing,

multi-denomination deposits and

withdrawals% of Deposit transactions automated

46%

72%

Deposits

Network average Test SST location

The denomination choice

for custom er wi thdrawals

is a great feature

The large screeni s very engaging

and easy to use

Chase customer reactions

Sales tablet interfaceInstant issue debit and credit

Note: data reflects 4Q11

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Ability to adapt



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Winners will need to adapt to regulatory change

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We have made a commitment to One Chase and customer experience Not all

banks have capacity to invest in people, systems and processes needed

Customers

Products

Services

Banking

Customers

Products

Services

Mortgage

Customers

Products

Services

Credit Card

The customer

Banking and

InvestmentsMortgage

360 degree view of customer relationship

Differentiated view of customer needs

Consistent customer experience by segment

Full range of best-in-class products and services

Product-based delivery model One Chase customer experience

One

Customers see us as One Chase We should too

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Significant opportunity to deepen affluent relationships (in-footprint segment 5 households)

There is significant opportunity to deepen affluent relationships across LOBs

Credit card2.7mm HHs (54%)

Banking and Credit card1.4mm HHs (28%)

Consumer Banking0.8mm HHs (18%)

Note: data as of May 2011

4% of Chase in-footprint households have a Banking, Credit card, and Mortgage relationship

Unmet opportunity ($B)

D&I at competitors $1,100 $1,650 $4,100

Credit card spendat competitors

40 35 65

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Near-term headwinds will slowOur focus on strong underlying growth will pay off

Simulated pretax income ($B)

$6.4

($0.8 )

($0.6 )

$5.5 +/-

$0.5

$1.0

$7.5 +/-

$3.0

$0.6

$12.5 +/-

2011 PretaxIncome

Durbin YoY Low rates /flat curve

Simulated2012

Costefficiencies

Growthopportunities

Simulated2015

Growthopportunities

Spreadnormalization

Simulated2020

Near-term headwinds Medium-term uplift Longer-term growth

$0.5: 02-11

New Builds

($0.3): 12+

New Builds

$0.3: Business

Banking

$0.4: Chase

Private Client

$0.5: 02-11

New Builds

$1.0: 12+

New Builds

$0.7: Business

Banking

$0.6: Chase

Private Client

1 Consistent with 2012 outlook provided in 4Q11 earnings materials

1

1

4% underlying annual growth (net of investment) assumed

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Documents

6 Consumer Business Baasdasdsanking Investor Day FINAL