JP Morgan Chase 2015 Annual Report Download - page 82

Management’s discussion and analysis
72 JPMorgan Chase & Co./2015 Annual Report
CONSOLIDATED RESULTS OF OPERATIONS
The following section of the MD&A provides a comparative
discussion of JPMorgan Chase’s Consolidated Results of
Operations on a reported basis for the three-year period
ended December 31, 2015. Factors that relate primarily to a
single business segment are discussed in more detail within
that business segment. For a discussion of the Critical
Accounting Estimates Used by the Firm that affect the
Consolidated Results of Operations, see pages 165–169.
Revenue
Year ended December 31,
(in millions) 2015 2014 2013
Investment banking fees $ 6,751 $ 6,542 $ 6,354
Principal transactions 10,408 10,531 10,141
Lending- and deposit-related
fees 5,694 5,801 5,945
Asset management,
administration and
commissions 15,509 15,931 15,106
Securities gains 202 77 667
Mortgage fees and related
income 2,513 3,563 5,205
Card income 5,924 6,020 6,022
Other income(a) 3,032 3,013 4,608
Noninterest revenue 50,033 51,478 54,048
Net interest income 43,510 43,634 43,319
Total net revenue $ 93,543 $ 95,112 $ 97,367
(a) Included operating lease income of $2.1 billion, $1.7 billion and $1.5
billion for the years ended December 31, 2015, 2014 and 2013,
respectively.
2015 compared with 2014
Total net revenue for 2015 was down by 2% compared with
the prior year, predominantly driven by lower Corporate
private equity gains, lower CIB revenue reflecting the
impact of business simplification initiatives, and lower CCB
Mortgage Banking revenue. These decreases were partially
offset by a benefit from a legal settlement in Corporate, and
higher operating lease income, predominantly in CCB.
Investment banking fees increased from the prior year,
reflecting higher advisory fees, partially offset by lower
equity and debt underwriting fees. The increase in advisory
fees was driven by a greater share of fees for completed
transactions as well as growth in industry-wide fee levels.
The decrease in equity underwriting fees resulted from
lower industry-wide issuance, and the decrease in debt
underwriting fees resulted primarily from lower loan
syndication and bond underwriting fees on lower industry-
wide fee levels. For additional information on investment
banking fees, see CIB segment results on pages 94–98 and
Note 7.
Principal transactions revenue decreased from the prior
year, reflecting lower private equity gains in Corporate
driven by lower valuation gains and lower net gains on sales
as the Firm exits this non-core business. The decrease was
partially offset by higher client-driven market-making
revenue, particularly in foreign exchange, interest rate and
equity-related products in CIB, as well as a gain of
approximately $160 million on CCB’s investment in Square,
Inc. upon its initial public offering. For additional
information, see CIB and Corporate segment results on
pages 94–98 and pages 105–106, respectively, and Note 7.
Asset management, administration and commissions
revenue decreased compared with the prior year, largely as
a result of lower fees in CIB and lower performance fees in
AM. The decrease was partially offset by higher asset
management fees as a result of net client inflows into assets
under management and the impact of higher average
market levels in AM and CCB. For additional information,
see the segment discussions of CIB and AM on pages 94–98
and pages 102–104, respectively, and Note 7.
Mortgage fees and related income decreased compared
with the prior year, reflecting lower servicing revenue
largely as a result of lower average third-party loans
serviced, and lower net production revenue reflecting a
lower repurchase benefit. For further information on
mortgage fees and related income, see the segment
discussion of CCB on pages 85–93 and Notes 7 and 17.
For information on lending- and deposit-related fees, see
the segment results for CCB on pages 85–93, CIB on pages
94–98, and CB on pages 99–101 and Note 7; securities
gains, see the Corporate segment discussion on pages 105–
106; and card income, see CCB segment results on pages
85–93.
Other income was relatively flat compared with the prior
year, reflecting a $514 million benefit from a legal
settlement in Corporate, higher operating lease income as a
result of growth in auto operating lease assets in CCB, and
the absence of losses related to the exit of non-core
portfolios in Card. These increases were offset by the
impact of business simplification in CIB; the absence of a
benefit recognized in 2014 from a franchise tax settlement;
and losses related to the accelerated amortization of cash
flow hedges associated with the exit of certain non-
operating deposits.
Net interest income was relatively flat compared with the
prior year, as lower loan yields, lower investment securities
net interest income, and lower trading asset balance and
yields were offset by higher average loan balances and
lower interest expense on deposits. The Firm’s average
interest-earning assets were $2.1 trillion in 2015, and the
net interest yield on these assets, on a fully taxable-
equivalent (“FTE”) basis, was 2.14%, a decrease of 4 basis
points from the prior year.
2014 compared with 2013
Total net revenue for 2014 was down by 2% compared with
the prior year, predominantly due to lower mortgage fees
and related income and lower other income. The decrease
was partially offset by higher asset management,
administration and commissions revenue.
Investment banking fees increased compared with the prior
year, due to higher advisory and equity underwriting fees,
largely offset by lower debt underwriting fees. The increase