JP Morgan Chase 2010 Annual Report Download - page 85

JPMorgan Chase & Co./2010 Annual Report
85
2009 compared with 2008
Net income was $1.2 billion, a decrease of $541 million, or 31%,
from the prior year, driven by lower net revenue.
Net revenue was $7.3 billion, a decrease of $790 million, or 10%,
from the prior year. Worldwide Securities Services net revenue was
$3.6 billion, a decrease of $713 million, or 16%. The decrease was
driven by lower securities lending balances, primarily as a result of
declines in asset valuations and demand, lower balances and
spreads on liability products, and the effect of market depreciation
on certain custody assets. Treasury Services net revenue was
$3.7 billion, a decrease of $77 million, or 2%, reflecting spread
compression on deposit products, offset by higher trade revenue
driven by wider spreads and growth across cash management and
card product volumes.
TSS generated firmwide net revenue of $10.2 billion, including $6.6
billion of net revenue in Treasury Services; of that amount, $3.7
billion was recorded in the Treasury Services business, $2.6 billion
was recorded in the Commercial Banking business, and $245 million
was recorded in other lines of business. The remaining $3.6 billion of
net revenue was recorded in Worldwide Securities Services.
The provision for credit losses was $55 million, a decrease of $27
million from the prior year.
Noninterest expense was $5.3 billion, an increase of $55 million from
the prior year. The increase was driven by higher FDIC insurance
premiums, predominantly offset by lower headcount-related expense.
Selected metrics
Year ended December 31,
(in millions, except ratio data)
20
10
2009 2008
TSS firmwide discl
o
sures
Treasury Services revenue
–
reported $ 3,698 $ 3,702 $
3,779
Treasury Services revenue
reported in CB 2,632 2,642 2,648
Treasury Services revenue
reported in other lines of
business 247 245 299
Treasury Services fir
m
wide
revenue(a) 6,577 6,589 6,726
Worldwide Securities Se
r
vices
revenue 3,683 3,642 4,355
Treasury & Securitie
s
Services firmwide
revenue(a) $ 10,260 $ 10,231 $ 11,081
Treasury Services firmwide liability
balances (average)(b) $ 308,028 $ 274,472 $ 264,195
Treasury & Securities Se
r
vices
firmwide liability balances
(average)(b) 387,313 361,247 382,947
TSS firmwide fina
n
cial ratios
Treasury Services firmwide
overhead ratio(c) 55%
53
% 50%
Treasury & Securities Services
firmwide overhead ratio(c) 65 62 57
Selected metrics
As of or for the y
ear ended
Dece
mber 31,
(in millions, except ratio data and
where othe
rwise noted) 2010 2009 2008
Firmwide business metrics
Assets under custody (in billions)
$
16,120
$ 14,885 $ 13,205
Number of:
U.S.$ ACH transactions
originated 3,892 3,896 4,000
Total U.S.$ clearing volume
(in thousands) 122,123 113,476 115,742
International electronic funds
transfer volume (in thousands)(d) 232,453 193,348 171,036
Wholesale check volume
2,060
2,184 2,408
Wh
olesale cards issued
(in thousands)(e) 29,785 27,138 22,784
Credit data and quality
statistics
Net charge-offs/(recoveries)
$
1
$ 19 $ (2)
Nonaccrual loans
12
14 30
Allowance for credit losses:
Allowance for loan losses
65
88 74
Allowance for lending
-
related
commitments 51 84 63
Total allowance for credit
losses 116 172 137
Net charge-off/(recovery) rate —% 0.10% (0.01)%
Allowance for loan losses t
o
period-end loans 0.24 0.46 0.30
Allowance for loan losses to
average loans 0.28 0.48 0.28
Allowance for loan losses to
nonaccrual loans NM NM 247
Nonaccrual
loans to period
-
end
loans 0.04 0.07 0.12
Nonaccrual
loans to ave
r
age
loans 0.05 0.08 0.11
(a) TSS firmwide revenue includes foreign exchange (“FX”) revenue recorded in
TSS and FX revenue associated with TSS customers who are FX customers of
IB. However, some of the FX revenue associated with TSS customers who are
FX customers of IB is not included in TS and TSS firmwide revenue. The total
FX revenue generated was $636 million, $661 million and $880 million, for
the years ended December 31, 2010, 2009 and 2008, respectively.
(b) Firmwide liability balances include liability balances recorded in CB.
(c) Overhead ratios have been calculated based on firmwide revenue and TSS
and TS expense, respectively, including those allocated to certain other lines
of business. FX revenue and expense recorded in IB for TSS-related FX activity
are not included in this ratio.
(d) International electronic funds transfer includes non-U.S. dollar Automated
Clearing House (”ACH”) and clearing volume.
(e) Wholesale cards issued and outstanding include U.S. domestic commercial,
stored value, prepaid and government electronic benefit card products.