JP Morgan Chase 2010 Annual Report Download - page 38

36
states, our customers use our 5,300
bank branches and 16,000 ATMs, one
of the largest networks nationwide.
Our branches also are used to serve
customers from other lines of busi-
ness, including the Commercial Bank
and the Private Bank.
Mortgage Banking, Auto & Other
Consumer Lending services almost
9 million mortgages and provides
new loans through loan ocers and
correspondents. Our customers also
can obtain auto financing through
more than 16,000 auto dealerships
and student loans at more than 2,200
schools and universities nationwide.
While I remain confident of the
value of Chase’s retail franchise,
I know we can do better than the
results we’ve achieved over the past
two years. Fortunately, the core
strength of our franchise gives RFS
a foundation upon which to grow in
2011 and beyond: We will continue to
expand both our branch network and
our oerings within those branches,
as our mortgage portfolio works its
way back toward profitability.
JPMorgan Chase possesses one of
the most attractive retail financial
services franchises in America, with
ample opportunities to grow even
after one of the most challenging
periods in our history. We have
the scale, technology and people to
continue to deliver great service for
our customers and terrific value to
our shareholders.
Retail Financial Services (RFS)
serves consumers and small busi-
nesses through a range of venues:
in-person service at bank branches,
auto dealerships and school financial
aid oces; telephone banking; auto-
mated teller machines; and online
and mobile banking. The strength
of RFS derives from its scope across
two businesses: Retail Banking, and
Mortgage Banking, Auto & Other
Consumer Lending.
Our 29,000 branch salespeople assist
30 million RFS customers with
checking and savings accounts, credit
and debit cards, mortgages, home
equity and business loans, auto loans
and investment advice. Across 23
2010 Results: Solid Retail Earnings
Oset by Ongoing Mortgage Losses
For 2010, RFS generated net income
of $2.5 billion on revenue of $31.8
billion and a return on equity of 9%.
These results, while an improvement
from 2009, are well below what these
businesses are capable of producing
and what you should expect from us.
Our core banking and lending busi-
nesses performed well and saw solid
organic growth throughout the year,
but these results were partially oset
by elevated credit losses and mort-
gage repurchase expenses. As well,
we made additions to our loan loss
reserves for the home loan portfolios,
much of which are in run-o mode.
For comparison’s sake, if we exclude
our Home Lending portfolios and
repurchase expenses, RFS earnings
were $6.7 billion, with ROE of 37%.
This represents the earnings power
of RFS, as losses in the mortgage
portfolios will decrease significantly
in size and, eventually, contribute
positively to earnings.
Retail Financial Services
“I would not trade
our franchise for
anyone else’s.”