JPMorgan Chase

By:
Brianne Lavin
Company Research Analysis
 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.
 # 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
 S&P 500
 Dow Jones Industrials
 Dow Jones Global Titans
 #22 in FT Global 500
 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.
 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
 Top Competitors
 Bank of America
 Citigroup
 Bank of America  Merrill Lynch
ABN AMRO
# 12 in Fortune 500 
 HSBC USA
 Citigroup 

ING Direct USA
American Express
#8 in Fortune 500  Bank of New York
 Bear Stearns
 Merrill Lynch  CIBC
#34 in Fortune 500 

Capital One
Citigroup Global Markets
 Credit Suisse (USA)
 Deutsche Bank
 Goldman Sachs
 HSBC Finance
 HSBC Holdings
 Lehman Brothers
 Morgan Stanley
 RBC Financial Group
 UBS
 What does JPMORGAN offer the
customers?
 > Asset & Wealth Management
 > International Banking 
 > Business Credit
 > Investment Banking
 > Chase Commercial Online
 > Commercial Real Estate Banking
 > Online Solutions  
 > Credit Products
 > Securities Safekeeping 
 > Equipment Leasing
 > Trade Solutions 
 > Global and Regional Capabilities
 > Treasury Services  
 > Institutional Asset Management
 > Worldwide Securities Services
 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.
 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
 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

 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.
 Dedication
 Despite their powerhouse growth, they remain
committed to the success of the individual
companies they serve. But that’s 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.
 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, they’ll
continue to make their decisions where you
live, work, and do business.
Industry Analysis
 Total Market Size
 Consumers
 Small businesses
 Commercial Banking
 Corporate businesses
 International Businesses
 90 million consumers nationwide
 The Market Broken Down
 Investment Banking
 Retail Financial Services
 Card Services
 Commercial Banking
 Treasury & Securities Services
 Asset & Wealth Management
 Industry Structure

Distribution Key Customers

 Financial Industry  Key customers for the
Distribution occurs financial banking industry
are the obvious
through e-commerce, mail
and personal interaction. consumers, small
business and commercial
banking.
 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.
 Key Players
 JPMorgan’s main 3 competitors are:
 Bank of America
 Citigroup
 Merrill Lynch
 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
 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.
 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.
 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

 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.
Environmental Trends Impacting the
Industry

 Economic fundamentals
 Low interest rates
 Increasing regulatory requirements
 Internet technologies
 Consolidation
 Business models
 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.
 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."
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
Thank You
Any Questions?