JP Morgan Chase 2015 Annual Report Download - page 112

Management’s discussion and analysis
102 JPMorgan Chase & Co./2015 Annual Report
ASSET MANAGEMENT
Asset Management, with client assets of $2.4 trillion, is
a global leader in investment and wealth management.
AM clients include institutions, high-net-worth
individuals and retail investors in many major markets
throughout the world. AM offers investment
management across most major asset classes including
equities, fixed income, alternatives and money market
funds. AM also offers multi-asset investment
management, providing solutions for a broad range of
clients’ investment needs. For Global Wealth
Management clients, AM also provides retirement
products and services, brokerage and banking services
including trusts and estates, loans, mortgages and
deposits. The majority of AM’s client assets are in
actively managed portfolios.
Selected income statement data
Year ended December 31,
(in millions, except ratios
and headcount) 2015 2014 2013
Revenue
Asset management, administration
and commissions $ 9,175 $ 9,024 $ 8,232
All other income 388 564 797
Noninterest revenue 9,563 9,588 9,029
Net interest income 2,556 2,440 2,376
Total net revenue 12,119 12,028 11,405
Provision for credit losses 4465
Noninterest expense
Compensation expense 5,113 5,082 4,875
Noncompensation expense 3,773 3,456 3,141
Total noninterest expense 8,886 8,538 8,016
Income before income tax expense 3,229 3,486 3,324
Income tax expense 1,294 1,333 1,241
Net income $ 1,935 $ 2,153 $ 2,083
Revenue by line of business
Global Investment Management $ 6,301 $ 6,327 $ 5,951
Global Wealth Management 5,818 5,701 5,454
Total net revenue $12,119 $12,028 $ 11,405
Financial ratios
Return on common equity 21% 23% 23%
Overhead ratio 73 71 70
Pretax margin ratio:
Global Investment Management 31 31 32
Global Wealth Management 22 27 26
Asset Management 27 29 29
Headcount 20,975 19,735 20,048
Number of client advisors 2,778 2,836 2,962
2015 compared with 2014
Net income was $1.9 billion, a decrease of 10% compared
with the prior year, reflecting higher noninterest expense,
partially offset by higher net revenue.
Net revenue was $12.1 billion, an increase of 1%. Net
interest income was $2.6 billion, up 5%, driven by higher
loan balances and spreads. Noninterest revenue was $9.6
billion, flat from last year, as net client inflows into assets
under management and the impact of higher average
market levels were predominantly offset by lower
performance fees and the sale of Retirement Plan Services
(“RPS”) in 2014.
Revenue from Global Investment Management was $6.3
billion, flat from the prior year as the sale of RPS in 2014
and lower performance fees were largely offset by net client
inflows. Revenue from Global Wealth Management was $5.8
billion, up 2% from the prior year due to higher net interest
income from higher loan balances and spreads and net
client inflows, partially offset by lower brokerage revenue.
Noninterest expense was $8.9 billion, an increase of 4%,
predominantly due to higher legal expense and investment
in both infrastructure and controls.
2014 compared with 2013
Net income was $2.2 billion, an increase of 3% from the
prior year, reflecting higher net revenue and lower provision
for credit losses, predominantly offset by higher noninterest
expense.
Net revenue was $12.0 billion, an increase of 5% from the
prior year. Noninterest revenue was $9.6 billion, up 6%
from the prior year due to net client inflows and the effect
of higher market levels, partially offset by lower valuations
of seed capital investments. Net interest income was $2.4
billion, up 3% from the prior year due to higher loan and
deposit balances, largely offset by spread compression.
Revenue from Global Investment Management was $6.3
billion, up 6% due to net client inflows and the effect of
higher market levels, partially offset by lower valuations of
seed capital investments. Revenue from Global Wealth
Management was $5.7 billion, up 5% from the prior year
due to higher net interest income from loan and deposit
balances and net client inflows, partially offset by spread
compression and lower brokerage revenue.
Noninterest expense was $8.5 billion, an increase of 7%
from the prior year as the business continues to invest in
both infrastructure and controls.