JP Morgan Chase 2008 Annual Report Download - page 98

Management’s discussion and analysis
96 JPMorgan Chase & Co./ 2008 Annual Report
The following table presents the wholesale nonperforming assets by business segment as of December 31, 2008 and 2007.
2008 2007
Assets acquired in Assets acquired in
loan satisfactions loan satisfactions
As of December 31, Nonperforming Real estate Nonperforming Nonperforming Real estate Nonperforming
(in millions) loans owned Other assets loans owned Other assets
Investment Bank $ 1,175 $ 247 $ 1,079(a) $ 2,501 $ 353 $ 67 $ 33(a) $ 453
Commercial Banking 1,026 102 14 1,142 146 2 — 148
Treasury & Securities
Services 30 — — 30 ————
Asset Management 147 — 25 172 12 — — 12
Corporate/Private Equity 4— — 4 3——3
Total $ 2,382 $ 349 $ 1,118 $ 3,849 $ 514 $ 69 $ 33 $ 616
(a) Includes derivative receivables of $1.1 billion and $29 million as of December 31, 2008 and 2007, respectively.
Wholesale credit exposure – maturity and ratings profile
Maturity profile(c) Ratings profile
December 31, 2008 Due in 1 year Due after 1 year Due after Investment-grade (“IG”) Noninvestment-grade Total %
(in billions, except ratios) or less through 5 years 5 years Total AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below Total of IG
Loans 32% 43% 25% 100% $ 161 $ 87 $ 248 65%
Derivative receivables 31 36 33 100 127 36 163 78
Lending-related commitments 37 59 4 100 317 63 380 83
Total excluding loans
held-for-sale and
loans at fair value 34% 50% 16% 100% $ 605 $186 791 77%
Loans held-for-sale and
loans at fair value(a) 14
Receivables from customers 16
Total exposure $ 821
Net credit derivative
hedges notional
(b)
47% 47% 6% 100% $ (82) $ (9) $ (91) 90%
Maturity profile(c) Ratings profile
December 31, 2007 Due in 1 year Due after 1 year Due after Investment-grade (“IG”) Noninvestment-grade Total %
(in billions, except ratios) or less through 5 years 5 years Total AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below Total of IG
Loans 44% 45% 11% 100% $ 127 $ 62 $ 189 67%
Derivative receivables 17 39 44 100 64 13 77 83
Lending-related commitments 35 59 6 100 380 67 447 85
Total excluding loans
held-for-sale and
loans at fair value 36% 53% 11% 100% $ 571 $ 142 713 80%
Loans held-for-sale and
loans at fair value(a) 24
Total exposure $ 737
Net credit derivative
hedges notional
(b)
39% 56% 5% 100% $ (68) $ — $ (68) 100%
(a) Loans held-for-sale and loans at fair value relate primarily to syndicated loans and loans transferred from the retained portfolio.
(b) Represents the net notional amounts of protection purchased and sold of single-name and portfolio credit derivatives used to manage the credit exposures; these derivatives do not
qualify for hedge accounting under SFAS 133.
(c) The maturity profile of loans and lending-related commitments is based upon the remaining contractual maturity. The maturity profile of derivative receivables is based upon the matu-
rity profile of average exposure. See page 99 of this Annual Report for a further discussion of average exposure.
The following table presents summaries of the maturity and ratings profiles of the wholesale portfolio as of December 31, 2008 and 2007. The
increase in the proportion of loans maturing after five years was predominantly due to the Washington Mutual transaction. The ratings scale is
based upon the Firm’s internal risk ratings and generally correspond to the ratings as defined by S&P and Moody’s.