JP Morgan Chase 2010 Annual Report Download - page 36

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Fortunately, it isn’t in our nature to
take success for granted – it’s our
firm’s culture to continually earn and
re-earn client trust.
2010 Results: Near Record
Performance
The Investment Bank generated solid
returns. Net income was $6.6 billion
on revenue of $26 billion, just short
of 2009’s record levels. ROE was
17% on $40 billion of capital – our
through-the-cycle target.
J.P. Morgan’s debt markets leader-
ship, combined with investor confi-
dence and low interest rates, enabled
corporates to prepare their balance
sheets for long-term growth. Clients
made good progress, although the
Gulf oil spill, sovereign debt concerns
and regulatory uncertainty challenged
markets. As well, the mid-year “flash
crash” was a healthy reminder that
technology can outpace control.
Customers, spearheading the
recovery, selected J.P. Morgan for
numerous public and private capital
raises. We were privileged to work
for many prominent clients like
General Motors, the Agricultural
Bank of China and Novartis.
In late 2009, I rejoined the Invest-
ment Bank after 10 years in Asset
Management. Obviously, there were
many changes during that decade
as world GDP nearly doubled and
the digital revolution impacted
consumers, businesses and countries
on a global scale.
I’d like to highlight three changes
that are particularly meaningful
for our business. First, technology
ceased to be “support” for trading
and banking; it now is part of
J.P. Morgan’s client oering. Second,
countries like China, long tagged
“emerging,” today are powerful and
important; this antique label no
longer applies. Third, J.P. Morgan
became both a universal bank and a
leading investment bank, with finan-
cial strength, capabilities and a client
base unparalleled in global finance.
The Investment Bank now serves
approximately 16,000 investor
clients and 5,000 issuer clients. No
doubt the financial crisis helped us
gain share – we were the safe harbor
and, subsequently, as the recovery
took hold, a port of opportunity.
We expanded our market-making
footprint, adding local capabilities
in important countries like Russia
and Brazil. China’s approval of our
securities joint venture means a
larger in-country presence and the
ability to participate in domestic
underwriting. Three of the top five
exchanges for IPOs last year were in
China, accounting for nearly 40% of
dollar volume.
An emphasis on liquidity, derivative
book repositioning and trading disci-
pline led to our best-ever revenue-
to-risk relationship. There were no
trading-day losses in three of the last
four quarters.
The Sempra acquisition added
skill and capacity, particularly in oil
and base metals, and 1,000 clients.
J.P. Morgan now serves client needs
across all important physical and
financial commodity markets.
The formation of our Markets
Strategies group, with senior manage-
ment and advanced quantitative and
programming talent, brought focus
and momentum to electronic trading
and related initiatives.
Investment Bank
“ J.P. Morgan’s financial
strength, client base
and capabilities are
unparalleled …
we are positioned to
serve clients as they
expand globally.”