JP Morgan Chase 2005 Annual Report Download - page 50

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Management’s discussion and analysis
JPMorgan Chase & Co.
48 JPMorgan Chase & Co. /2005 Annual Report
Noninterest expense was $1.3 billion, an increase of $521 million, or 63%,
primarily related to the Merger.
Selected metrics
Year ended December 31,(a)
(in millions, except headcount and ratios) 2005 2004 2003
Revenue by product:
Lending $ 1,076 $ 764 $ 396
Treasury services 2,299 1,467 896
Investment banking 213 120 66
Other 823 (6)
Total Commercial Banking revenue 3,596 2,374 1,352
Revenue by business:
Middle Market Banking $ 2,369 $ 1,499 $ 772
Mid-Corporate Banking 548 367 194
Real Estate 534 368 206
Other 145 140 180
Total Commercial Banking revenue 3,596 2,374 1,352
Selected average balances
Total assets $ 56,561 $ 36,435 $ 16,460
Loans and leases 51,797 32,417 14,049
Liability balances(b) 73,395 52,824 32,880
Equity 3,400 2,093 1,059
Average loans by business:
Middle market $ 31,156 $ 17,471 $ 5,609
Mid-corporate banking 6,375 4,348 2,880
Real estate 10,639 7,586 2,831
Other 3,627 3,012 2,729
Total Commercial Banking loans 51,797 32,417 14,049
Headcount 4,456 4,555 1,730
Credit data and quality statistics:
Net charge-offs $26$61$76
Nonperforming loans 272 527 123
Allowance for loan losses 1,392 1,322 122
Allowance for lending-related commitments 154 169 26
Net charge-off rate 0.05% 0.19% 0.54%
Allowance for loan losses to average loans 2.69 4.08 0.87
Allowance for loan losses to
nonperforming loans 512 251 99
Nonperforming loans to average loans 0.53 1.63 0.88
(a) 2004 results include six months of the combined Firm’s results and six months of heritage
JPMorgan Chase results. 2003 reflects the results of heritage JPMorgan Chase only.
(b) Liability balances include deposits and deposits swept to on-balance sheet liabilities.
Commercial Banking revenues are comprised of the following:
Lending includes a variety of financing alternatives, which are often
provided on a basis secured by receivables, inventory, equipment, real
estate or other assets. Products include:
• Term loans
• Revolving lines of credit
• Bridge financing
• Asset-based structures
• Leases
Treasury services includes a broad range of products and services
enabling clients to transfer, invest and manage the receipt and
disbursement of funds, while providing the related information reporting.
These products and services include:
• U.S. dollar and multi-currency clearing
• ACH
• Lockbox
• Disbursement and reconciliation services
• Check deposits
• Other check and currency-related services
• Trade finance and logistics solutions
• Commercial card
• Deposit products, sweeps and money market mutual funds
Investment banking products provide clients with sophisticated capital-
raising alternatives, as well as balance sheet and risk management tools,
through:
• Loan syndications
• Investment-grade debt
• Asset-backed securities
• Private placements
• High-yield bonds
• Equity underwriting
• Advisory
• Interest rate derivatives
• Foreign exchange hedges