j.p. morgan chase-katalin j.gabor m., zsanett z

KATALIN JÓZAN, GÁBOR MOLNÁR, ZSANETT ZEKE

Agenda

• history

past

History1799 Its earliest predecessor was chartered ( The Bank of The Manhattan Co.)

1871 J.P. Morgan & Co. was founded in New York

1895 J.P. Morgan & Co. helped end the panic of 1893

1907 During the financial panic, bailed out the city of New York, and rescued the Stock Exchange

1913 Congress established the Federal Reserve System to regulate the money supply and manage economy. Also gave the right for banks to make real estate loans

1915 During the war J.P. Morgan & Co. arranged a $500 million Anglo- French loan

1920s Wave of bank mergers - Chase National Bank acquired 5 banks

1929 Market crash and the Great Depression

1930 Chase National Bank is the world's largest bank (assets of $ 2.7 billion)

1930 Another predecessor, the National Bank of Detroit was formed at the depth of the Depression

1933 Congress passed the Glass - Steagall act

1929- Market crash and the Great Depression

• Black Tuesday, October 29, 1929 - many of the loans went into default

• For the banking industry, the 1930s would be the most difficult period in history

• In June 1932, depositors began withdrawing money from First National – Chicago’s largest bank – when claiming First National was insolvent

• Houston's major banks were on the brink of collapse

• National Bank of Detroit was established at these times

History1955 Chase National Bank merged with the Manhattan Co, formed The Chase Manhattan

Bank

1959 Guaranty Trust Co. merged J.P. Morgan & Co., created Morgan Guaranty Trust Co. of NewYork

1978 Morgan Guaranty has 16 overseas branches

1985 The Chase Manhattan Bank launched its electronic home banking service (Spectrum)

The Financial Crisis of 2008

• Lobbying against Glass-Steagall Act

• By 2008, financial institutions made massive derivative bets on the US housing market

• J.P. Morgan as a "too big to fail" bank

• The bank has to pay $13 Billion for causing the Financial crisis

• Aspire to be the best.• Execute superbly.• Build a great team and a

winning culture.

Business principles

Who

JP Morgan Chase & Co.

mission

vision

strategies

daily operations

„to be the best financial services company in the

world”

COMPLEX SIMPLICITY

What

How

Foundation

Headquarter

Expansion

Employees

Clients

Product range

New YorkNew York Charlotte

JPM BAC C JPM BAC C JPM BAC C0

5000001000000150000020000002500000

L/Dloan deposit

mill

ion

of d

olla

rsAsset

2005 2008 2014

2005 2008 20140

20000400006000080000

100000Revenues

JPMBACC

2005 2008 20140

1000020000300004000050000600007000080000

Expenses

JPM#REF!C

SP P/E EPS0

10

20

30

40

50

60

70 64.4

11.795.46

16.3523.83

0.69

53.35

21.56

2.48

JPMBACC

DY1.61.71.81.9

22.1

JPM BAC C

2005

2008

2014

-50.00% 0.00% 50.00%

ROE

CBACJPM

2014

Risk management

identification

measurement

monitoring or control

reporting

governance

Approaches

•Interest rate risk•macroeconomic forces •Derivative securities•risk management derivatives •Asset-backed securities•mortgage backed securities

Types of risks• Capital risk

• Compliance risk

• Country risk

• Legal risk

• Market risk

• Operational risk

• Reputation risk

• Non-USD FX risk

The two major risks

Credit Risk

• Definition

• Credit risk organization

• Risk identification and

measurement

• Stress testing

• Risk reporting

Liquidity Risk

• Definition

• Liquid assets

• Illiquid assets

• The demand and supply

of liquidity

Competitors

D/E IC DC05

1015202530

10.45.7

3.058.03 5.13 23.5

8.1

1.69

2013

D/E IC DC0

5

10

15

20

10.016.4

3.387.6 6.57 3

7.7

1.5

2014

D/E IC DC0

5

10

15

20

10.56

4.72 4.33

8.76 1.56

8.334.72

6.5

2012

Conclusion

past

„BE THERE FOR OUR CLIENTS AND COMMUNITIES IN GOOD TIMES — AND, MORE IMPORTANT, IN BAD TIMES”/JAMIE DIMON/

ReferencesBank of America Corporation (2015). 2014 Annual Report. Available at: http://media.corporate-ir.net/media_files/IROL/71/71595/AR2014.pdf (Accessed: 05 May 2015)citi (2015). 2014 Annual Report. Available at: http://www.citigroup.com/citi/investor/quarterly/2015/ar14c_en.pdf (Accessed: 05 May 2015)JPMorgan Chase & Co. (2015). ANNUAL REPORT 2014. Available at: http://files.shareholder.com/downloads/ONE/131692045x0x820066/f831cad9-f0d8-4efc-9b68-f18ea184a1e8/JPMC-2014-AnnualReport.pdf (Accessed: 05 May 2015)JPMorgan Chase & Co. (2008). The History of JPMorgan Chase & Co.: 200 Years of Leadership in Banking. Available at: http://www.jpmorganchase.com/corporate/About-JPMC/document/shorthistory.pdf (Accessed: 07 May 2015)

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