JP Morgan Chase 2003 Annual Report Download - page 21

Execution focus in 2003
• Chase Home Finance produced record levels of loan originations and applications, gaining market
share. Home Equity origination volume, a strategic growth area, was up 71%.
• Chase Auto Finance – a best-in-class business – increased market share and produced record auto
loan and lease originations. Operating earnings were up 23%.
• Chase Cardmember Services achieved record new accounts and volume. Significant progress was
made in online account acquisition, cross-selling to other Chase customers, and launching new
rewards-based products. Credit quality remained stable.
• Chase Regional Banking expanded its customer relationships, resulting in a 14% increase in core
deposits and a 77% increase in cross-selling of credit products.
• Chase Middle Market maintained market leadership and strong credit quality, while also achieving
significant efficiency gains in its sales model.
•TSS signed seven acquisitions during 2003, which are projected to add significantly to revenue in
2004. Six of the acquisitions closed in 2003.
• Revenue growth improved quarter to quarter, benefiting strongly from a fourth quarter rebound in
Investor Services revenues.
• Through Six Sigma and other productivity initiatives, TSS found $91 million of efficiencies during
the year.
•Building on our pending merger with Bank One,
increase scale and breadth in consumer credit
markets, and add scale and reach in branch bank-
ing and middle markets nationwide.
•Continue to grow home equity, adding near-
prime capabilities.
•Rejuvenate branches and enhance sales culture
to address needs of small-business and mass
affluent clients.
•Deliver on cross-selling potential.
Growth strategies
•Make selected acquisitions to increase scale in
traditional product areas, extend product lines
and expand geographic reach.
•Achieve market differentiation by delivering
competitively superior client service.
•Expand in high-potential, under-penetrated
market segments.
•Continue relentless focus on productivity to fund
investments in the business.
•Continue to build a premier w holesale financial
services franchise, to take advantage of the
ongoing global markets recovery.
•Using IB’s scale and platform, deliver a complete
set of solutions and products to the firm’s top-tier
franchise of issuer and investor clients.
•Build upon IB’s innovative derivative and risk
management capabilities.
•Invest in technology to achieve best-in-class
infrastructure.
•IB improved its ranking in Global Equity and Equity-Related to #4 from #8. It maintained its #1
ranking in Global Syndicated Loans and its rankings in Global Investment-Grade Bonds (#2) and
Global Announced M&A (#5).
• IB reported record earnings, driven by strong growth in capital markets revenues and equity
underwriting fees, and significant improvement in commercial credit quality, which resulted in
lower credit costs.
• Capital markets and lending total return revenues grew 22%, driven by activity in fixed income
and equity capital markets and by the Global Treasury business.
• JPMorgan advised on the largest transatlantic acquisition of 2003 – Amersham’s $10 billion
acquisition by the General Electric Company.
• JPMP generated net gains of $346 million in the direct private equity portfolio, including realized
cash gains of $535 million.
• The firm led or co-led a number of signature acquisitions across the United States (Pinnacle Foods,
Aurora Foods, Kraton Polymers, Unisource Energy), Europe (IM O Car Wash), Asia (Singapore Yellow
Pages) and Latin America (Convermex).
• Two companies in the JPMP portfolio went public in 2003 and three additional companies have
had initial public offerings thus far in 2004. At present, the portfolio includes five companies that
have filed for public offerings in the coming months.
• JPMP reduced exposure to third-party funds and real estate through sales of selected investments
that were not central to its portfolio strategy.
• JPMorgan Chase continued to reduce its percentage of capital invested in private equity, to 15%
at year-end 2003 from 20% at year-end 2002.
•Leverage JPMorgan Chase’s extensive worldw ide
network to gain access to unique investment
opportunities.
• Focus on the upper end of middle market buy-
outs, growth equity and venture opportunities
worldwide.
•Draw on JPMP’s vast network to originate and
manage successful investments.
•Continue to service external institutional
and private banking investors w hile stepping
up efforts to integrate them into the JPMP
global network.
•JPMorgan Fleming Asset Management achieved solid investment results across all major asset
classes, including U.S. and international equity and global fixed income strategies, and real estate.
• JPMorgan Private Bank delivered growth in number of clients, levels of assets, and number of
products used per client in 2003. Net asset inflow s were $8 billion. Expenses were flat and credit
costs declined by nearly 60%.
• BrownCo continued to see positive momentum in online trading. Assets under supervision
increased by 48% from the end of 2002, and customer margin balances rose by 27% to
$2.4 billion.
• IMPB saw its retirement participant base grow to more than 750,000 individuals from 270
corporate retirement plans as a result of the Retirement Plan Services acquisition.
•Increase focus on the rapidly growing U.S. retire-
ment market by aligning JPMorgan Retirement
Plan Services and Brow nCo.
•Achieve private banking growth through deepen-
ing relationships with existing clients and through
acquiring new clients and assets w orldwide.
•Continue to build upon our fund management
joint venture in China.
• Capture opportunities in the growing market for
alternative investments and customized strategic
investment solutions.