JP Morgan Chase 2003 Annual Report Download - page 35

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J.P. Morgan Chase & Co. / 2003 Annual Report 33
Corporate credit allocation
In 2003, TSS was assigned a corporate credit allocation of pre-
tax earnings and the associated capital related to certain credit
exposures managed w ithin IB’s credit portfolio on behalf of
clients shared w ith TSS. Prior periods have been revised to reflect
this allocation. For 2003, the impact to TSS of this change
increased pre-tax operating results by $36 million and average
allocated capital by $712 million, and it decreased SVA by
$65 million. Pre-tax operating results w ere $46 million low er
than in 2002, reflecting low er loan volumes and higher related
expenses, slightly offset by a decrease in credit costs.
Business outlook
TSS revenue in 2004 is expected to benefit from improved global
equity markets and from two recent acquisitions: the November
2003 acquisition of the Bank One corporate trust portfolio, and
the January 2004 acquisition of Citigroup’s Electronic Funds
Services business. TSS also expects higher costs as it integrates
these acquisitions and continues strategic investments to sup-
port business expansion.
Year ended December 31, Operating Revenue
(in millions) 2003 2002 Change
Treasury Services $1,927 $ 1,818 6%
Investor Services 1,449 1,513 (4)
Institutional Trust Services(a) 928 864 7
Other(a)(b) (312) (303) (3)
Total Treasury & Securities Services $3,992 $ 3,892 3%
(a) Includes a portion of the $41 million gain on sale of a nonstrategic business in 2003:
$1 million in Institutional Trust Services and $40 million in Other.
(b) Includes the elimination of revenues related to shared activities with Chase Middle Market,
and a $50 million gain on sale of a non-U.S. securities clearing firm in 2002.