JP Morgan Chase 2006 Annual Report Download - page 25

JPMorgan Chase & Co. / 2006 Annual Report 23
ness loans, investments and insurance. Over 1,200 additional mortgage offi-
cers provide home loans throughout the country.
Card Services
With more than 154 million cards in circulation and $152.8 billion in managed
loans, Chase Card Services (“CS”) is one of the nation’s largest credit card
issuers. Customers used Chase cards for over $339 billion worth of transac-
tions in 2006.
Chase offers a wide variety of general-purpose cards to satisfy the needs of
individual consumers, small businesses and partner organizations, including
cards issued with AARP, Amazon, Continental Airlines, Marriott, Southwest
Airlines, Sony, United Airlines, Walt Disney Company and many other well-
known brands and organizations. Chase also issues private-label cards with
Circuit City, Kohl’s, Sears Canada and BP.
Chase Paymentech Solutions, LLC, a joint venture with JPMorgan Chase and
First Data Corporation, is the largest processor of MasterCard and Visa pay-
ments in the world, having handled over 18 billion transactions in 2006.
Commercial Banking
Commercial Banking (“CB”)
serves more than 30,000 clients, including corpo-
rations, municipalities, financial institutions and not-for-profit entities. These
clients generally have annual revenues ranging from $10 million to $2 billion.
Commercial bankers serve clients nationally throughout the RFS footprint and
in offices located in other major markets.
Commercial Banking offers its clients industry knowledge, experience, a dedi-
cated service model, comprehensive solutions and local expertise. The Firm’s
broad platform positions CB to deliver extensive product capabilities –
including lending, treasury services, investment banking and asset manage-
ment – to meet its clients’ U.S. and international financial needs.
Treasury & Securities Services
Treasury & Securities Services (“TSS”) is a global leader in providing transac-
tion, investment and information services to support the needs of institutional
clients worldwide. TSS is one of the largest cash management providers in the
world and a leading global custodian. Treasury Services (“TS”) provides a vari-
ety of cash management products, trade finance and logistics solutions, whole-
sale card products, and liquidity management capabilities to small and midsized
companies, multinational corporations, financial institutions and government
entities. TS partners with the Commercial Banking, Retail Financial Services
and Asset Management businesses to serve clients firmwide. As a result, cer-
tain TS revenues are included in other segments’ results. Worldwide Securities
Services (“WSS”) stores, values, clears and services securities and alternative
investments for investors and broker-dealers; and manages Depositary Receipt
programs globally.
INTRODUCTION
JPMorgan Chase & Co., a financial holding company incorporated under
Delaware law in 1968, is a leading global financial services firm and one of
the largest banking institutions in the United States, with $1.4 trillion in
assets, $115.8 billion in stockholders’ equity and operations worldwide. The
Firm is a leader in investment banking, financial services for consumers and
businesses, financial transaction processing, asset management and private
equity. Under the JPMorgan and Chase brands, the Firm serves millions of cus-
tomers in the United States and many of the world’s most prominent corpo-
rate, institutional and government clients.
JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase Bank,
National Association (“JPMorgan Chase Bank, N.A.”), a national banking
association with branches in 17 states; and Chase Bank USA, National
Association (“Chase Bank USA, N.A.”), a national bank that is the Firm’s
credit card issuing bank. JPMorgan Chase’s principal nonbank subsidiary is
J.P. Morgan Securities Inc., the Firm’s U.S. investment banking firm.
JPMorgan Chase’s activities are organized, for management reporting purposes,
into six business segments, as well as Corporate. The Firm’s wholesale busi-
nesses comprise the Investment Bank, Commercial Banking, Treasury &
Securities Services and Asset Management segments. The Firm’s consumer
businesses comprise the Retail Financial Services and Card Services segments.
A description of the Firm’s business segments, and the products and services
they provide to their respective client bases, follows.
Investment Bank
JPMorgan is one of the world’s leading investment banks, with deep client
relationships and broad product capabilities. The Investment Bank’s clients are
corporations, financial institutions, governments and institutional investors. The
Firm offers a full range of investment banking products and services in all
major capital markets, including advising on corporate strategy and structure,
capital raising in equity and debt markets, sophisticated risk management,
market-making in cash securities and derivative instruments, and research. The
Investment Bank (“IB”) also commits the Firm’s own capital to proprietary
investing and trading activities.
Retail Financial Services
Retail Financial Services (“RFS”), which includes Regional Banking, Mortgage
Banking and Auto Finance reporting segments, helps meet the financial needs
of consumers and businesses. RFS provides convenient consumer banking
through the nation’s fourth-largest branch network and third-largest ATM net-
work. RFS is a top-five mortgage originator and servicer, the second-largest
home equity originator, the largest noncaptive originator of automobile loans
and one of the largest student loan originators.
RFS serves customers through more than 3,000 bank branches, 8,500 ATMs
and 270 mortgage offices, and through relationships with more than 15,000
auto dealerships and 4,300 schools and universities. More than 11,000 branch
salespeople assist customers, across a 17-state footprint from New York to
Arizona, with checking and savings accounts, mortgage, home equity and busi-
This section of the Annual Report provides management’s discussion and analysis
(“MD&A”) of the financial condition and results of operations for JPMorgan Chase.
See the Glossary of terms on pages 145–146 for definitions of terms used through-
out this Annual Report. The MD&A included in this Annual Report contains state-
ments that are forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are based upon the current beliefs
and expectations of JPMorgan Chase’s management and are subject to significant
risks and uncertainties. These risks and uncertainties could cause JPMorgan Chase’s
results to differ materially from those set forth in such forward-looking statements.
Certain of such risks and uncertainties are described herein (see Forward-looking
statements on page 147 of
this Annual Report) and in the JPMorgan Chase Annual
Report on Form 10-K for the year ended December 31, 2006 (“2006 Form 10-K”),
in Part I, Item 1A: Risk factors, to which reference is hereby made.
MANAGEMENT’S DISCUSSION AND ANALYSIS
JPMorgan Chase & Co.