JP Morgan Chase 2015 Annual Report Download - page 80

Management’s discussion and analysis
70 JPMorgan Chase & Co./2015 Annual Report
client inflows and continued to deliver strong investment
performance with 80% of mutual fund assets under
management (“AUM”) ranked in the 1st or 2nd quartiles over
the past five years. AM also increased average loan balances
by 8% in 2015.
In 2015, the Firm continued to adapt its strategy and
financial architecture toward meeting regulatory and capital
requirements and the changing banking landscape, while
serving its clients and customers, investing in its businesses,
and delivering strong returns to its shareholders.
Importantly, the Firm exceeded all of its 2015 financial
targets including those related to balance sheet optimization
and managing its capital, its GSIB surcharge and expense. On
capital, the Firm exceeded its capital target of reaching Basel
III Fully Phased-In Advanced and Standardized CET1 ratios of
approximately 11%, ending the year with estimated Basel III
Advanced Fully Phased-in CET1 capital and ratio of $173.2
billion and 11.6%, respectively. The Firm also exceeded its
target of reducing its GSIB capital surcharge, ending the year
at an estimated 3.5% GSIB surcharge, achieved through a
combination of reducing wholesale non-operating deposits,
level 3 assets and derivative notionals.
The Firm’s fully phased-in supplementary leverage ratio
(“SLR”) was 6.5% and JPMorgan Chase Bank, N.A.’s fully
phased-in SLR was 6.6%. The Firm was also compliant with
the fully phased-in U.S. liquidity coverage ratio (“LCR”) and
had $496 billion of HQLA as of year-end 2015.
The Firm’s tangible book value per share was $48.13, an
increase of 8% from the prior year. Total stockholders’ equity
was $247.6 billion at December 31, 2015.
Tangible book value per share and each of these Basel III
Advanced Fully Phased-In measures are non-GAAP financial
measures; they are used by management, bank regulators,
investors and analysts to assess and monitor the Firm’s
capital position and liquidity. For further discussion of Basel
III Advanced Fully Phased-in measures and the SLR under the
U.S. final SLR rule, see Capital Management on pages 149–
158, and for further discussion of LCR and HQLA, see
Liquidity Risk Management on pages 159–164.
The Firm provided credit to and raised capital of $2.0 trillion
for its clients during 2015. This included $705 billion of
credit to corporations, $233 billion of credit to consumers,
and $22 billion to U.S. small businesses. During 2015, the
Firm also raised $1.0 trillion of capital for clients.
Additionally, $68 billion of credit was provided to, and capital
was raised for, nonprofit and government entities, including
states, municipalities, hospitals and universities.
The Firm has substantially completed its business
simplification agenda, exiting businesses, products or clients
that were non-core, not at scale or not returning the
appropriate level of return in order to focus on core activities
for its core clients and reduce risk to the Firm. While the
business simplification initiative impacted revenue growth in
2015, it did not have a meaningful impact on the Firm’s
profitability. The Firm continues to focus on streamlining,
simplifying and centralizing operational functions and
processes in order to attain more consistencies and
efficiencies across the Firm. To that end, the Firm continues
to make progress on simplifying its legal entity structure,
streamlining its Global Technology function, rationalizing its
use of vendors, and optimizing its real estate location
strategy.