A Culture of Excellence

EXCEPTIONAL CLIENT SERVICE

OPERATIONAL EXCELLENCE

A COMMITMENT TO INTEGRITY, FAIRNESS AND RESPONSIBILITY

A GREAT TEAM AND WINNING CULTURE

We distributed the principles to our employees and regulators and followed up with a more extensive “How We Do Business – The Report,” which is available on our public website. We recently launched a firmwide Culture and Conduct Program to

Matt Zames further reinforce the behavioral standards implicit in these Business Principles. The program is not about Our firm has a rich, 200-year history manage to the needs of our critical reinventing our culture but recom- of serving its clients and customers stakeholders – shareholders, clients, mitting to it. It considers our culture, with integrity and establishing customers and employees – given our business models, tone from senior relationships based on trust. It is significance to worldwide markets executives, governance and incen- our responsibility to preserve and and the global economy. We continue tive structures; how they influence build upon the solid values on to respond to the changing regulatory daily decision making at all levels; which this firm was founded. The landscape, including requirements and the impact of those decisions on tone we set as stewards of the firm for G-SIBs, and we are evaluating our clients, our reputation and the is critical, and managing a culture the businesses we manage and the integrity of the markets. Our objec- of excellence, as well as integrity, products and services we offer in the tive is to instill in our employees a requires us to have a sophisticated context of these new requirements. strong sense of personal accountabil- and comprehensive infrastructure. As an example, we announced the ity through broad, deep integration of firm is targeting up to a $100 billion The Chief Operating Office is central common standards across businesses reduction in non-operating wholesale to delivering operational excellence. and geographies. In 2015, we will deposits. At a minimum, we are It is responsible for many of the develop a suite of metrics to enable committed to ensuring we remain firm’s corporate utilities, including management to keep a pulse on how safely within the 4.5% G-SIB capital Treasury, the Chief Investment we are doing in regard to our com- surcharge bucket and are looking Office, Global Technology, Operations, pany culture and with respect to spe- at additional actions to potentially Oversight & Control, Compliance, cific conduct risks. We have commit- reduce our surcharge by an incre- Corporate Strategy, Global Real ted, in 2015, that each line of business mental 50 basis points. Estate, Global Security & Military and function will implement a Affairs and Regulatory Affairs, Last year, we published Business Culture and Conduct Program aligned among others. In 2014, we focused a Principles, key themes around which to the firmwide framework. great deal on what it means to be a we want to drive the firm. These prin- Execution against our principles Global Systemically Important Bank ciples are fundamental to our success requires us to be ever mindful of (G-SIB) and how best to ensure we and provide guidance for our identity new opportunities to reduce com- as a company while informing our plexity and improve efficiency. As firmwide strategic priorities. part of our business simplification strategy, we spun off One Equity Partners, the firm’s private equity

40 unit, which was completed in early Liquidity and interest rate risk. In 2014, we further increased January 2015. We realized signifi- risk management continue to the proportion of investment securi- cant savings through the reshaping be important ties that we intend to hold to matu- of our workforce and consolidation rity to nearly $50 billion, which will Liquidity and interest rate risk of jobs in the right locations, creat- help to mitigate Basel III capital vol- management are fundamental to how ing efficiencies in labor and real atility in a rising rate environment. we manage the firm and take on estate costs and promoting consis- The average yield of our investment increasing importance for the firm as tency in our control culture. We are securities portfolio increased by 45 a G-SIB. As we advance our thinking committed to managing expenses basis points from a yield of 2.32 in in response to an evolving set of reg- tightly, eliminating waste, and 2013 to 2.77 in 2014 despite gener- ulatory requirements, we are driving running the firm in a nimble and ally lower interest rates, and we a coordinated approach to manage- flexible manner. maintained an average portfolio ment of the firm’s balance sheet. rating of AA+. We continue to look for additional 2014 featured final versions of impor- opportunities to do business in tant regulatory liquidity rules, nota- Cybersecurity remains a top priority smarter ways. For example, over bly the liquidity coverage ratio by the last few years, the firm made a In 2014, we experienced cyber U.S. banking regulators and Basel’s significant investment in telecom- threats of an unprecedented scale. final rule on the net stable funding munications and collaboration tools This included a data breach we ratio, with which we are compliant. to facilitate alternatives to air incurred last summer, which we We devoted significant resources to travel. We have rationalized the voluntarily disclosed. We continue understanding the potential liquidity population of vendors, in large part to discover and block new and impact of changing Fed monetary through the establishment of pre- unique malware, viruses and phish- policy and rising rates, particularly ferred vendors in categories such as ing attempts to obtain access to our the impact on our wholesale deposit information technology (IT), real data. Importantly, cyber attacks to base. As a direct result of this effort, estate services, printing, and mar- date have not resulted in material we further refined and improved our keting and advertising. In addition, harm to our clients or customers internal stress framework. We con- we are in the process of rationaliz- and have not had a material adverse tinue to be in compliance with our ing our population of law firms and impact on our results or operations. internal measures. physical security vendors. To defend against these threats, we We progressed our technology build- We will not compromise on the con- spent more than $250 million in out to enable more flexible and trol environment and, to that end, 2014 on our cyber capabilities. We timely liquidity stress testing for the continue to tighten data controls for established three global Security enterprise and major legal entities. ourselves, as well as for our third Operations Centers to monitor, We further evolved the Liquidity parties. This involves fortifying our detect and defend the firm. We Risk Oversight group, which provides defenses to ensure all of our manag- organized cyber defense exercises independent assessment, measure- ers, employees and vendors are fol- to test our capabilities and con- ment, monitoring and control of lowing the appropriate security and ducted an independent assessment liquidity risk. We established a firm- hygiene practices with regard to work of our cybersecurity program to wide program to set up a best-in-class email, password protection, data identify actions for continual intraday liquidity management proc- encryption, system entitlements and improvement. We doubled the ess and infrastructure in preparation social media. We continue to carefully number of cybersecurity personnel for a changing market environment monitor third-party systems and to over the past two years and hired and emerging regulatory expectations. increase our oversight of all the ven- top-notch security experts. dors with whom we work to make We continue to actively manage our Over the next two years, we will sure their protections are adequate. investment securities portfolio of increase our cybersecurity spend by over $340 billion, the primary vehi- nearly 80% and enhance our cyber cle used to offset the firm’s loan and defense capabilities with robust deposit mismatch and moderate testing, advanced analytics and firmwide structural interest rate

41 improved technology coverage. We In 2015, approximately 50% of our Our focus on the control agenda has will strengthen our partnerships technology investment spend will be become “business as usual” with government agencies to under- in support of our strategic business We have made substantial invest- stand the full spectrum of cyber priorities, including: ments and transformative changes risks in the environment and • Digital: End-to-end digital com- to strengthen our control environ- increase our response capabilities. merce across web, mobile and ment. Since the creation of Oversight & Control in 2012 to embed greater Technology is critical to our future channels and across our focus and discipline on controls competitive advantage and to businesses. within each business, the group the protection of our clients and • Data & Analytics: Leveraging of has successfully integrated into customers our firmwide data assets for opera- each business and function to make Over the past six years, the firm has tional stability, customer value, the control agenda a core strategy invested 8%-9% of its annual reve- revenue generation, and risk and and priority. nue to fund our global technology security. capabilities, one of the largest invest- Over the past few years, Oversight • Mobile, Unified Communications: ments we make at JPMorgan Chase. & Control has significantly enhanced Communications channel integra- Even as we are committed to expense the quality of, and standard re- tion into business applications to management, we will not compro- quirements for, our business self- enrich interaction among employ- mise our investment opportunities assessment process, designed to ees, clients and customers. for the future, especially as they identify and assess key operating relate to innovative and efficient • Next Generation Cloud Infrastruc- risks in each area. We introduced delivery to our clients and customers ture: Increased cloud footprint to common control reporting on a and protection of their security. enhance cost efficiency and flexibil- range of metrics and, in 2015, will ity using highly elastic, on-demand, further develop capabilities to Demand for technology continues to self-service infrastructure. analyze trends and conduct impact grow. IT supports 318,000 desktops, analysis across businesses. Of 66,000 servers in 32 strategic data • Next Generation Development: the original 24 enterprise-wide centers, 25,000 databases and 7,100 Increased developer productivity, programs established in 2013 to business applications. Our global quality and pace of application tackle top control issues, many now telecommunications network con- delivery. are complete, and the work has nects our presence in 60 countries transitioned from projects to • Security & Controls: Framework to along with our 5,600 Chase business-as-usual operations. We address the increasing volume, branches and 18,000 ATMs. We have anticipate closing the lion’s share pace and sophistication of security more than 35 million active online, of the programs in 2015. threats. and over 19 million active mobile, clients and customers. We process In addition, we will continue to The compliance agenda is approximately $6 trillion of pay- innovate in 2015 by improving continuously evolving ments daily on behalf of the firm branch automation and efficiency, Our firm’s compliance capabilities and its clients and customers. extending our electronic trading have improved significantly over the platforms, launching an advisor past year. 2014 was focused on execu- workstation platform for Asset tion across the foundational compo- Management and implementing a nents of the compliance program. new commercial real estate loan We enhanced standards and protocols originations system. across core practices, strengthened our employee compliance program, and continue to evolve and develop

42 trade and e-communications surveil- Conclusion we make decisions each step of the lance programs. Building a world- way. We are indebted to our prede- We understand the importance of class Anti-Money Laundering (AML) cessors for the solid foundation we operational excellence, effective risk program remains a top priority, and inherited and will be vigilant in our management across all risk catego- a significant amount of work has commitment to maintaining the ries, a fortress infrastructure, and a been completed on the Bank Secrecy world-class reputation we have culture that is rooted in integrity, Act/AML and Sanctions programs, worked so hard to build. The com- fairness and responsibility. We have including a new, global set of Know pany is well-positioned to help our addressed new challenges by apply- Your Customer standards. clients and customers to the fullest, ing lessons learned more effectively, with integrity, and that is what we This year, Compliance will focus on and we are able to respond more intend to do. To achieve our objec- enhancing standards for market con- quickly owing to the talent of our tives, we must execute strategically duct risk, fiduciary responsibilities, people and our investments in and with urgency. employee compliance and regula- infrastructure and controls. tory reporting. Ongoing strategic We continue to strengthen our technology investments and process client- and customer-centered improvements will position us to culture and set high standards for continue delivering in a heightened performance as we invest in targeted regulatory environment. growth opportunities and first-rate Matt Zames systems and operations, simplify our Chief Operating Officer businesses and redouble expense management efforts. Our Business Principles will be our guidepost as

2014 HIGHLIGHTS AND ACCOMPLISHMENTS

• Evaluated business activities in • Met liquidity regulatory require- • Managed expenses tightly • For the sixth consecutive year, light of G-SIB; committed to oper- ments; advanced our own internal through, among other things, invested 8%-9% of the firm’s ating at or below the 4.5% G-SIB framework, including technology creating economies of scale annual revenue in global capital surcharge bucket capabilities and independent risk through consolidation of jobs technology capabilities and oversight in strategic locations and estab- digital innovation • Targeted a $100 billion reduction lishment of preferred vendors in non-operating wholesale • Maintained AA+ average rating • Processed an average of deposits in our investment securities port- • Matured our efforts to further approximately $6 trillion in folio; improved the average yield strengthen controls, including payments daily • Launched a firmwide Culture and of investment securities from transitioning many enterprise-wide Conduct Program to reinforce our 2.32 in 2013 to 2.77 in 2014 programs to business-as-usual • Spent more than $250 million Business Principles across all despite low rate environment in 2014 to protect the firm businesses and functions globally from cyber attacks and will • Spun off One Equity Partners increase cyber spend by nearly as part of ongoing business 80% over the next two years simplification efforts

43 Consumer & Community Banking

Building stronger relationships with customers has led to measurable improvement in our leadership posi- tions. This year, the Federal Deposit Insurance Corporation (FDIC) named us #1 in deposit growth among the largest 50 U.S. banks. We are the #1 credit card issuer, #1 in total U.S. credit and debit payments volume, the #2 mortgage originator and servicer, and the #3 non-captive auto lender. Chase is #1 in ATMs and #2 in branches, and chase.com is the #1 online banking portal. Forrester Research named us #1 in mobile banking functionality for the third consecutive year. Gordon Smith With our combination of scale, I’m proud to say that Consumer & grow over time without happy cus- leading products and outstanding Community Banking (CCB) has tomers. And in our business, where service, we wouldn’t trade our grown stronger in 2014, adding more customers have extensive choices franchise for anyone’s. customers, building market share across all of our products, that’s and improving the customer experi- acutely true. 2014 financial results ence across all of our channels. Across CCB, our businesses delivered We’re pleased with our progress. I Today, we’ve earned relationships strong underlying results throughout don’t think anyone can ever declare with nearly half of all U.S. households 2014 despite market and industry victory on the customer experience, and 3.9 million small businesses. headwinds. Our net income was $9.2 but we can celebrate the success we’ve In 2014, we added approximately billion, down from $11.1 billion in had. One key measure that we track is 600,000 new CCB households, bring- 2013. Our revenue of $44.4 billion our Net Promoter Score (NPS), which ing our total to almost 58 million. was down 5% from $46.5 billion in simply is how many customers say As important, we’ve deepened the 2013, primarily due to the smaller they would refer a friend to Chase. relationships with our existing mortgage originations market during Since mid-2011, our NPS has roughly customers. More people consider 2014. In 2014, we also experienced doubled in Consumer Banking and Chase their primary bank than any lower reserve releases across the Card and tripled in Business Banking. other bank in our footprint, and Mortgage and Credit Card businesses In fact, nearly all CCB businesses are customer attrition has reached and felt the continued impact of at or close to all-time highs. historic lows. More customers are lower deposit margins. While credit doing business with Chase, and they We also received validation from performance still is very strong, the are staying with us for the long term. respected outside groups. The Ameri- rate of improvement compared with can Customer Satisfaction Index last year has slowed. Overall, we Leading the industry named Chase #1 in customer satis- ended the year with a strong return Our core strategy for CCB for the faction among large banks in 2014. on equity (ROE) of 18%, just under past four years has been to build life- J.D. Power ranked us #3 in Highest our long-term target of 20% ROE. time, engaged relationships with our Customer Satisfaction in Mortgage We particularly are pleased that we customers. That begins and ends Originations (up from #12 in 2010) achieved this positive momentum with a consistent and outstanding and #2 in Mortgage Servicing (up while hitting our aggressive expense customer experience across Chase. I from #13 in 2010). In Business Bank- target. Since 2012, we have taken have yet to see any business that can ing, we are #1 or #2 in every region (up from #22 in 2010).

44 $3.2 billion of expense out of CCB, Mortgage Payments is one of the most inter- and we are on track to reduce The 2014 mortgage market was one esting areas in our business as con- expenses by an additional $2 billion of the most challenging we have sumers are adapting to new ways to by the end of 2016. Staying disci- faced. We have been very focused on pay. We like our strategic position plined and being as efficient as pos- transforming our Mortgage franchise as both a bank that issues cards for sible allow us to invest back into our to a simpler, higher quality and less consumers and a payment processor businesses and create strong returns volatile business. In 2014, Mortgage for merchants. Through ChaseNet, for all of you who have chosen to originations were down 53% from we also have our own network and invest in our company. 2013 due to the challenging rate can complete every aspect of the environment. But we didn’t forget payment transaction. CCB demonstrated significant the industry lessons learned over growth in nearly every business One of the most exciting develop- the past several years and remained in 2014. ments of the year was Apple PayTM. disciplined. We ceded some market Chase participated as both a consumer Here are some highlights from share to focus on our strategy of issuer and a merchant acquirer. our businesses: acquiring high-quality loans. And Chase cardholders can register their we actively reduced our foreclosure cards in Apple PayTM and make digi- Consumer & Business Banking inventory from roughly 170,000 in tal payments simply by hitting a fin- Consumer & Business Banking depos- 2013 to 90,000 in 2014. gerprint button on their iPhone® 6. its were up 8% to nearly half a trillion Our merchant customers will be able dollars by the end of the year. We One of the lessons we learned from to use our software development kit talked about customer attrition reach- the industry crisis in Mortgage is to enable payments online, in-app ing historic lows – it is down 4% that complexity kills. We have and in-store. Tokenization will make since 2010. To put this in perspective, reduced the number of mortgage those payments safe and secure. that equates to 1 million Consumer products from 37 to 18, and by the end of 2015, it will be down to 15. Banking households and an incre- Auto mental $15 billion in deposits. Yet those 15 products still will meet 97% of customers’ needs. I’m sure In Auto, we continue to grow while Chase Private Client (CPC) continues the 22 products we are exiting were maintaining our credit discipline. Our to be a notable success. We have developed with good intentions to originations volume of $27.5 billion grown to more than 325,000 CPC help customers, but they created was up 5%, with our average loans up clients, up 51% from 2013. Client unnecessary complexity for employ- 4%. Here, too, we have stayed disci- investment assets were up 13%. Since ees and more expense and execution plined by retaining high credit stan- 2012, we’ve tripled our net new CPC risk than we needed. dards. Our average FICO score on deposits and investments, with 60% loan originations was 32 points of new investments coming from Mortgage Banking also has made higher than the industry average. customers who are investing with tremendous progress in reducing Digital Chase for the first time. With 55% expenses. Mortgage expenses were of affluent households living within down 30% over 2013. Digital is transforming our industry. two miles of a Chase branch or ATM, We’ve seen tremendous growth rates Credit Card and Payments we feel well-positioned to continue in customer adoption of our digital Card Services sales volume of $465.6 that growth. services. The number of customers billion was up 11% year-over-year, who are active on Chase mobile Business Banking loan originations outperforming the industry for the went from 8.2 million in 2011 to were up 28% in 2014. Loans were 28th consecutive quarter. Credit 19.1 million in 2014. On average, up 6%, and deposits were up 12%. trends continue to improve, and we added about 18,000 new mobile And we are extremely proud that credit card net charge-offs were users per day throughout 2014. we were the #1 Small Business down 12% from 2013. Our Merchant Administration lender for women Services business processes nearly and minorities in the United States half of the total e-commerce pay- for the third year in a row. ment volume in the United States. Our processing volume was $847.9 billion, up 13% year-over-year.

45 Quite simply, we plan to be the bank • 30 million Mobile Chase QuickPaySM Throughout 2014, we made excellent of choice for digitally savvy custom- transactions, up 80% progress on our control agenda. ers. Digital is core to our commit- We exited 5,000 Politically Exposed ment to an outstanding customer • 60 million in Mobile Bill Pay, up 30% Person relationships and 4,000 rela- experience. We’re bringing digital • 200 million deposits made in a tionships with small businesses in service to everything from routine Chase ATM, up 10% high-risk geographies and industries. deposits to credit card applications, And we closed more than 100,000 rewards redemptions and mortgage Providing a best-in-class digital accounts through AML screening application tracking. experience also is more efficient for and monitoring processes. We hope the bank. It costs us 3 cents to accept that by the end of 2015, we will have Today’s customers expect to be able a deposit made from a smartphone closed most of our legacy issues and to transact with us whenever and and 8 cents for one at an ATM. With invested in a stronger, simpler and wherever they choose, whether that’s our new technologies, we have low- safer business for the long term. through a superior digital experi- ered our costs per deposit by ~50% ence, a convenient ATM or a neigh- in 2014 versus 2007. As we move forward into 2015, our borhood branch. Every experience core strategy is focused on three key needs to be personal, easy and fast. Our 5,600 branch network is one of areas: customers, controls and profit- our most important assets for acquir- ability. We will continue to focus on With advances in technology, cus- ing and deepening relationships. Last a great customer experience while tomers will be able to complete 90% year, our branches helped nearly investing in the best mobile and digi- of teller transactions at our smart 20,000 first-time homebuyers and tal capabilities in the industry. We ATMs by the end of 2016. We have 400,000 new small businesses and will continue to further simplify our made things easier by increasing approved more than 1 million credit business by reducing the number of withdrawal limits and allowing cus- cards for customers. We’ve built a non-core products we have and tomers to receive their cash in any footprint that covers the highest investing in automation. And to bill denomination they choose. growth markets in the United States. deliver shareholder value, we will Mobile also is changing quickly. But now that our buildout is com- meet our expense targets and drive Customers now can securely view plete, we won’t open as many new out unnecessary costs while continu- their balances without having to log branches over the next few years. As ing to invest in our business. in and print statements directly all effective retailers do, we continu- from their phone. ally review locations to determine Conclusion where we can consolidate and still Customers aren’t choosing between Across CCB, we feel very well- remain convenient for customers. As digital and branches – they are using positioned for the future. The CCB a result, our overall branch count will both. When our customers use digi- Leadership Team and I are so proud be down slightly from prior years. tal, we see lower attrition, and we’re to serve our customers and share- more likely to be their primary bank. Controls: Strengthen and simplify our holders and to lead this exceptional We know that our customers still business business. Thank you for your invest- want to come into the branch when Over the past two years, we have ment in our company. they need advice or support, but for made significant investments in a basic transaction, they increasingly improving our controls. We hired prefer to do it themselves. dedicated teams to focus on de-risking Here are some of the indicators of the business and invested in technol- the rapid growth in digital in just ogy to automate more processes and one year: reduce manual errors. As one exam- ple, we have strengthened our Anti- Gordon Smith • 19 million mobile app users, up 20% Money Laundering (AML) procedures CEO, Consumer & Community Banking • 45 million Mobile QuickDepositSM with a technology fix. Employees must transactions, up 25% fill out every data field before complet- ing a new customer application.

46 2014 HIGHLIGHTS AND ACCOMPLISHMENTS

• Consumer relationships with • #1 in deposit growth among the • #1 Small Business Administration • #1 wholly-owned merchant almost half of U.S. households largest 50 U.S. banks by the FDIC lender for women and minorities acquirer in the United States in the United States for the third • #1 among large banks in the 2014 • Outpaced the industry in deposit year in a row • #2 mortgage originator; American Customer Satisfaction growth for the third consecutive #2 mortgage servicer Index survey for the third year in year • #1 credit card issuer in the United a row States based on loans outstanding • #3 non-captive auto lender • #1 in deposit share in three of the • #1 primary banking relationship largest deposit markets • #1 U.S. co-brand credit card issuer share in our footprint • #1 most visited banking portal in • #1 in total U.S. credit and debit Net Promoter Scores1 the United States — chase.com; payments volume #1 mobile banking functionality Household Attrition Rates2

Net Promoter Score1 Chase Household Attrition Rates3

(6) PPT 2010 2014 63 61 60

53 (4) PPT 43

37 35 32 (1) PPT

15 12

Consumer Banking Business Banking Card Mortgage Banking Auto2

May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 Business Banking Consumer Banking Card

Source: Internal data Source: Internal data 1 Note: Net Promoter Score (NPS) = % promoters minus % detractors 3 Includes households that close all Chase accounts; average of annualized 2 Auto NPS score tracked beginning in January 2012 monthly attrition rates over 12 months for 2010 and 2014 PPT = Percentage points

The Branch of the Future is here today

In our branches, state-of-the-art smart ATMs allow customers to self-serve for transactions. Today, 50% of all transactions can be made at an ATM. By the end of 2016, that number will be 90%.

47 Corporate & Investment Bank

In a year marked by uneven eco- nomic recovery in Europe, low mar- ket volatility and the implementation of additional capital standards, the ability to embrace change and adapt enabled the CIB to maintain its lead- ing market share across all business lines and generate strong returns on $34.6 billion in net revenue – the highest among our corporate and investment bank peers. With an improving global economy in 2015, I am confident that many of the headwinds we encountered last year will turn into tailwinds. As the recovery spreads throughout regions, Daniel Pinto countries and industry sectors, we foresee CEOs gaining confidence to In 2014, the Corporate & Investment our top-tier rankings across the CIB’s pursue more opportunities. We Bank (CIB) continued to deliver for spectrum of products and services. remain one of the few truly global clients on the strength of its unique banks that can provide the complete Last year, J.P. Morgan helped clients scale, its complete range of offerings array of products and services to fuel raise $1.6 trillion in capital, a 7% and its global reach. corporate growth, which, in turn, increase over the previous year. Of underpins economic expansion. By any measure, the J.P. Morgan CIB that amount, $61 billion was raised is an outstanding franchise. No other on behalf of states, local govern- Earnings firm places so consistently among the ments, hospitals, universities, school top ranks of products across Invest- districts and nonprofits. Those funds For the year, the CIB reported net ment Banking, Markets and Investor were earmarked to build research income of $6.9 billion on net revenue Services. Our 2014 performance facilities, construct children’s hospi- of $34.6 billion with a reported return stands as an example of our ability to tals, finance clean water projects on equity (ROE) of 10%. Excluding adapt to new capital and regulatory through green bonds and extend legal expense, the CIB earned $8.7 bil- rules while optimizing our business, new rail lines in cities to alleviate lion with an ROE of 13%. Investment capturing efficiencies and targeting traffic congestion, among other pub- Banking fees of $6.6 billion were up expense reductions – even as we lic service projects. The CIB also was 4% from the year before. And since continued to invest for the future. the #1 firm in U.S. dollar clearing for 2010, the CIB’s Global Investment clients with a 19% share on Fedwire Banking fees have risen by 25% With a global roster of 7,200 clients, and the Clearing House Interbank compared with 17% for the rest of counting more than 80% among the Payments System (CHIPS). the industry, according to Dealogic. Fortune 500, the CIB offers an inven- tory of integrated financial products It is a franchise that would be Combined revenue in Treasury and services. To serve that client extremely difficult to replicate, espe- Services and Securities Services rose base, the CIB has more than 51,000 cially in the regulatory and economic by 15% during the past five years, far employees and a presence in 60 environment we encounter today. outpacing the rest of the top players’ countries. Our expertise runs the 2% gain. But we are not complacent. Nor do we gamut across investment banking, take our top rankings for granted. In The Corporate & Investment Bank’s market-making, investor services, an evolving industry, we must be will- broad range of products and services treasury services and research. The ing to anticipate and embrace change, has the positive effect of smoothing work we accomplished in 2014 on operate efficiently and be vigilant in out business fluctuations in different behalf of our clients is reflected in ensuring that our conduct doesn’t just market and economic environments. meet high standards – it sets them. For example, since 2010, the CIB 48 experienced overall volatility in capture cost savings from divestitures 18% compared with the year before. annual revenue of just 4% compared and simplification efforts already The power of our partnership with with 6% for its top competitors. That undertaken in 2014. Commercial Banking has been stability, across fixed income and an important factor in bolstering equity markets, is rooted in our tradi- Serving clients = gaining share J.P. Morgan’s market share, even as tion of strong risk management. J.P. Morgan gained share and contin- the overall industry wallet has declined in recent years. What’s more, this year’s ROE is ued to hold top-tier positions across calculated on $61 billion of allocated our lines of business, a testament to In 2014, our client demographic capital, which is $13.5 billion, or 28%, the firm’s client focus and resiliency. continued its shift toward interna- greater today than it was in 2012. In a difficult year, the CIB share of tional business. Since 2010, the CIB’s Investment Banking fee revenue led combined revenue from Europe, the But strong results going forward the industry at 8.1%, maintaining its Middle East and Africa (EMEA), Asia depend upon our maintaining a #1 ranking for the sixth year in a Pacific and Latin America grew by disciplined approach to expenses. row, according to Dealogic. Since 2010, we have reduced front office costs by more than $2 billion. Also impressive is our ability to work Optimizing the Businesses under Although much of that reduction collaboratively across business lines, Multiple Constraints has been offset by cost increases in making it easier for clients to realize their strategic growth plans. For Profitability controls, litigation and regulatory fees, constraints we believe those areas are reaching a instance, by collaborating across the firm, the CIB once again was able to peak and will normalize over time. CCAR Capital facilitate client strategies through its stress (e.g., SLR, Over the next three years, we have test G–SIB) partnerships, notably with Asset Portfolio targeted expense reductions of $2.8 Management and Commercial optimization billion, partly coming from more Banking. In fact, more Commercial end-to-end efficiencies in technology Banking business flowed to the and operations and a better allocation CIB during 2014 than ever before, Balance Liquidity sheet (e.g., LCR, of resources according to the depth of generating a record $2 billion in NSFR) client relationships. We also expect to Investment Banking revenue, up by

Net Revenue and Overhead Ratio1,2 Net Income1,2,3 ROE1,3 (%) and Capital ($ in billions) ($ in billions) ($ in billions)

O/H ratio1,3 64% 66% 61% 58% 62%

5-year average: $34.7 5-year average: $8.9 5-year average: 17% $36.7 19% $35.7 $34.6 18% 18% $33.4 $33.0 $10.4 15% $9.3 $8.5 $8.7 13% $61.0 $7.5 $56.5

+$13.5 (up 28%) $46.5 $47.0 $47.5

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

1 Net revenue, net income, ROE and overhead (O/H) ratio, exclude FVA (effective 2013) and DVA, non-GAAP financial measures, for 2013 and prior years. These measures are used by management for assessment of the underlying performance of the business and for comparability with peers 2 All years have been revised for preferred dividends 3 All years exclude the impact of legal expense DVA = debit valuation adjustment; FVA = funding valuation adjustment; GAAP = generally accepted accounting principles in the U.S.; LCR = liquidity coverage ratio; NSFR = net stable funding ratio; SLR = supplementary leverage ratio 49 12%. In recent years, international and nimble. The CIB has established a Drawing from the report, we have clients collectively have accounted successful track record of optimizing rededicated ourselves to the principles for half of our revenue. They are its business model while adjusting to espoused by J.P. Morgan, Jr., in 1933 progressively seeking a broader multiple regulatory and other con- when he said: “I should state that at range of our services and using more straints, among them leverage, liquid- all times, the idea of doing only first- of J.P. Morgan’s product lineup. As of ity, Comprehensive Capital Analysis class business, and that in a first-class 2014, about half of our international and Review stress testing, G-SIB and way, has been before our minds.” clients use five or more products, Basel rules. We push down to a very while single-product client relation- granular level in the organization the Our strategies ships have declined by 30%. Interna- achievement of strong risk-adjusted We are continually looking for ways tionally, loans grew by 24%, assets returns in order to maximize long- to improve, be more efficient and under custody are up 36% and cross- term shareholder value. For our new- serve our clients better. Efficiency is border revenue with corporate cli- est constraint, G-SIB, the CIB will not a code word for eliminating ents has grown by 13% since 2010. be optimizing capital usage across worthwhile and beneficial products clients, products and G-SIB factors. In Investor Services, clients entrusted and services. To us, it means cultivat- J.P. Morgan with $20.5 trillion in In implementing those efforts, along ing and mining our business to find assets under custody, up from $16.1 with others, we have simplified our ways we can provide our services trillion in 2010, driven by asset appre- structure, improved our overall risk faster, better and more effectively. ciation, as well as client inflows. profile, and focused our attention Efficiency means making incremen- on the business lines most valuable Treasury Services operating deposits tal investments to enhance and to clients and the CIB. By selectively have nearly doubled since 2010. expand what we offer, closing gaps narrowing our business, we also In Markets, we now have an 11.5% to increase our longer term profit- improved our ability to invest in the market share in equities due to a 7% ability and embracing the raft of technologies and services our clients gain in revenue since 2010 compared change that is sure to define our will require and demand in the with revenue for the rest of the top industry going forward. We also will future while making us stronger for 10 banks, which is down collectively be looking to leverage a best-in-class the long term. by 7%. And in fixed income markets, infrastructure across the CIB, retiring duplicative platforms and participat- our share has consistently ranked #1 “How We Do Business — The Report” during the last five years. ing in industry utilities to perform During the course of last year, one non-proprietary functions across our Achieving completeness while of our most important projects was lines of business. a self-examination leading to an simplifying In our Global Investment Banking in-depth report called “How We Do business, we will build on our Having a complete set of core prod- Business – The Report.” J.P. Morgan’s leadership positions across advisory, ucts, accessible to clients across a culture and conduct must be based investing in sectors and geographies global network, does not mean we on integrity, respect for our colleagues where we see areas of opportunity intend to be all things to all people. and, above all, a commitment to and continued growth. As a result of shifts in the regulatory always act in our clients’ best inter- and market environments, we shed ests. In putting the lessons we’ve At the same time, we are making the ancillary businesses in 2014, includ- learned into practice, we are escalat- necessary investments across our ing the Global Special Opportunities ing issues promptly. We also have Markets businesses and are imple- Group investment portfolio, as well developed enhanced training pro- menting trading technologies to as our physical commodities activi- grams and are working with our ensure we are operationally prepared ties ­– though we kept our core regulators around the world to to capture client flows in whichever financial commodities business. improve our communication and form our clients want to trade. transparency. When every one of our Already, we have seen gains through No industry operates in a static envi- employees comes to work in the our efforts to date. Equity e-commerce ronment, least of all ours, so we recog- morning, the guiding principle should volume is up by 22% in the United nize the necessity of being adaptable be, and I believe it is, to do the right States and by 57% in EMEA, just thing for our clients at all times. in the last year. Recently, we have

50 consistently captured share gains in investors and broker-dealers, has look to us for global advisory capa- foreign exchange e-commerce, and made great strides to improve the bilities and cross-border expertise. we hold top-tier rankings on most of end-to-end client experience. We Our proven track record includes the major multi-dealer platforms. want to make doing business with advising on the largest, most com- us as easy as possible – from sales plex deals, which, in many cases, As an active market-maker, we can to onboarding to operations and involved acquisition financing and foresee the increasing complexity technology to client service. strategies to address shareholder that will define the Markets business. views and other marketplace forces. Our strategy recognizes that change From a capital perspective, the CIB is inevitable, even if its exact nature will continue to be affected by rules Emerging markets economies are cannot be foretold. But in whatever based on risk-weighted assets. We will becoming increasingly important in form our clients need us, the CIB will adjust our mix of capital-intensive global commerce. Both as consumers be prepared to capture client flow in businesses accordingly and fine-tune and as sources of new products and all its various forms. Whether it’s by the platform as needed. We are intent services, multinational companies voice, electronic or direct market on reducing our capital-footprint and are expanding their operations in access; whether we are acting on a on keeping ourselves nimble while those economies and will require principal basis or on an agency basis, remaining true to our reputation of the breadth of services J.P. Morgan we will be there for our clients with providing liquidity and capital in any uniquely is able to provide. the products they want. market environment. In 2015, we will execute our strategy Our Treasury Services business will Looking ahead, the signals are posi- in a way that optimizes capital, sup- focus on the needs of global multi- tive for a global economy that is ports our clients and aids economic nationals to capture the cross-border gaining momentum. Increasing con- growth. Global institutions turn to payments and foreign exchange fidence among consumers and CEOs J.P. Morgan because it has the talent, business associated with increasing is expected to continue. That would expertise and portfolio of services global trade flows. With our invest- underpin strong corporate earnings needed to conduct their business. ments in electronic commerce, we and healthy markets and sustain the We look forward to continuing that actively will pursue opportunities to active level of merger and acquisi- tradition in 2015 and beyond. migrate clients to electronic solu- tion (M&A) activity that marked tions and look for more efficiencies 2014. Our M&A practice particularly across our technology platforms. was strong in 2014, with improved wallet share on global industry-wide Our Investor Services business, which volume that was up by 26% for the contains some of our most important Daniel Pinto year. We believe 2015 will be another businesses on behalf of institutional CEO, Corporate & Investment Bank active period in which clients will

2014 HIGHLIGHTS AND ACCOMPLISHMENTS

• The Corporate & Investment Bank • Clients entrusted J.P. Morgan with • The CIB has more than 51,000 • The CIB is targeting $2.8 delivered market-leading performance $20.5 trillion in assets under cus- employees with a presence in billion in expense reductions in 2014; $34.6 billion in net revenue tody, up from $16.1 trillion in 2010. 60 countries, serving 7,200 by 2017, including capturing was the largest in the industry. of the world’s most significant cost savings from divestitures • Treasury Services and Securities corporates and financial and simplification efforts • J.P. Morgan helped clients raise $1.6 Services revenue rose by 15% institutions, governments and already undertaken in 2014. trillion in capital — 7% more than in during the past five years, far nonprofit organizations. the previous year. Of that amount, outpacing the rest of the top • The firm’s business mix $61 billion was raised on behalf of players’ 2% gain. • No other firm in 2014 placed is increasingly becoming states, local governments and public so consistently among the top international; since 2010, the institutions to finance educational ranks of products across CIB’s combined revenue from facilities, healthcare, environmental Investment Banking, Markets EMEA, Asia Pacific and Latin projects and other similar purposes. and Investor Services. America has grown by 12%.

51 Commercial Banking

term recovery plan and avoid dra- matic job reductions. During this stressful and challenging period, our beverage industry bankers consis- tently met with senior managers at the company to provide advice and guidance while they developed their plan. In 2014, the company success- fully completed its turnaround. Stay- ing with our clients through times like this, and earning their trust and gratitude, is the reason we come to work each day. We pride ourselves on our relationship focus and the loyal support we provide our clients.

Real competitive advantages Douglas Petno Our clients rely on our industry- Our commitment is to be the best Everything starts with our clients leading capabilities and comprehen- commercial bank by helping our sive services that no other commer- Selecting the best clients is absolutely clients succeed and by making a cial bank can provide. As part of critical to the value of our franchise positive difference in our communi- JPMorgan Chase, CB is uniquely and is deeply embedded in our cul- ties. In 2014, this meant investing in positioned with access to the #1 ture. We seek clients that are highly our business and controls, remaining investment bank, a leading asset reputable, share our risk philosophy, focused on our clients, and continu- management business, comprehen- have strong management teams and ing to execute our proven strategy sive payments and treasury services, work in preferred industries we truly with discipline and patience. and an extensive branch footprint. understand. We believe that we are Today, our typical client uses nine judged by the company we keep, For the year, Commercial Banking of our products and services, and it and, as such, our fantastic client (CB) delivered strong results, earning is common to see our longer-term franchise is the foundation for our $2.6 billion of net income on revenue relationships use more than 20. of $6.9 billion. Our continued expense entire business. discipline and exceptional credit When our clients seek to make more With our global reach and broad- performance helped us achieve a efficient payments, generate better based capabilities, we empower our return on equity of 18%. We are quite reporting, and securely process trans- bankers to be there for our clients proud of these results as our business actions from their own customers, with advice, capital and industry continues to navigate changes in the we leverage our market-leading com- insights. By knowing their business, regulatory landscape and adapt to mercial payments platforms. In 2014, supporting their ambitions and shifting market pressures. less than 30% of our clients utilized understanding their challenges, we our commercial card and merchant are able to best serve our clients and The drivers of our success remain services capabilities. We believe we build strong relationships. consistent over time: We have an can double the usage rates of both outstanding client franchise, real Trust and relationships are often rein- of these products over time. competitive advantages and a sus- forced in times of trouble. That was tainable growth plan. I’m proud to Collaborating with the Corporate & the case for one of our clients, a large convey our progress for 2014 and Investment Bank (CIB) enables us to beverage distributor based in the share our exciting plans for 2015. bring differentiated advice and market Seattle area. A few years ago, an unex- access to our clients. In 2014, CB rela- pected industry sales tax increase tionships generated a record $2 billion caused the company to lose a signifi- in investment banking revenue, repre- cant portion of revenue within a short senting 35% of the CIB’s North Ameri- time period. The family-run business can investment banking revenue and needed patience to execute a long- reaching the revenue target we set in 52 2011. We accomplished this by advis- In 2014, we continued to pursue our In our real estate businesses, we con- ing 75 clients on strategic transactions market expansion strategy in the tinue to see an excellent opportunity and executing more than 1,200 capital United States, increasing our foot- to grow our loan portfolio. We believe markets financings. As we expand our print to 34 new markets, where we we can add high-quality assets coverage, we believe we can do even served nearly 1,700 clients and gener- through the current market environ- more for our clients. We have set a ated $327 million in revenue. We are ment, as well as benefit from the new, long-term goal of $3 billion in on our way to reaching our long-term $1 trillion of industry maturities that investment banking revenue, and we revenue target of $1 billion from are due over the next three years. are confident our partnership with the these expansion markets. In addition, our lending platform is CIB will enable us to deliver over time. unique in the market and has allowed To enhance our long-standing indus- us to support new clients throughout While our platform and capabilities try leadership positions, we are adding the life of their loans. We are well- differentiate us, our success ultimately specialized bankers and underwriters positioned to take advantage of this hinges on our people. We have 7,300 in many key industries such as tech- tremendous opportunity and be a employees, including 1,400 bankers nology, healthcare, and food and agri- stable source of capital for clients. in 118 U.S. cities and 14 international culture. Industry specialization allows locations. These employees average us to better deliver client-specific solu- Clear priorities 20 years of experience, have deep tions, manage industry risks and dem- industry expertise and are firmly onstrate continuity across the industry Our priorities for 2015 reflect our rooted in their local communities. life cycle. We see real opportunities to mission. To help our clients succeed I’m incredibly proud of the quality expand our relationships in these key and make a difference in our com- and integrity of our people. Their industries and have positioned our munities, we will continue to invest continuous focus on our clients and teams to best serve these markets. in our business and hire the best positive impact in their communities people in our markets. We will focus More and more of our Middle Market never cease to impress. on delivering individual customer Banking clients expect their interna- solutions to build deeper, stronger tional activity to increase and be a Sustainable growth relationships. We will continue to meaningful percentage of total sales safeguard our clients and our busi- We continue to execute our disci- in the next few years. Our Interna- ness by maintaining our fortress con- plined, long-term growth plan, which tional Banking team is well-positioned trols. This means understanding all is designed to add new, high-quality to help these clients grow and operate risks in our business and investing clients and deepen those relation- in overseas markets. We’ve added in process improvements as needed. ships over time. We are growing our dedicated resources in 14 key interna- customer base by selectively expand- tional locations and have access to I am incredibly proud of the entire ing our geographic footprint and JPMorgan Chase’s international foot- Commercial Banking team. Because focusing on key growth industries. print in 60 countries. of its leadership and fortitude, we’ve been able to successfully adapt to the evolving regulatory environment Commercial Banking Gross Investment Banking Revenue1 and remain disciplined in a competi- ($ in billions) tive market. 2014 showed the real $3.0 power of our franchise, and I am

~3,700 excited about what we will achieve 2 GR: 7% rage CA ve $2.0 this year and beyond for our share- Joint CB-CIB client co GR: 13% $2.0 holders, clients and employees. ~2,500 venue CA IB re $1.7 $1.6 $1.0 $1.4 $1.3 $1.2 $1.0

2008 2009 2010 2011 2012 2013 2014 New long-term Douglas Petno target CIB partnership has resulted in di erentiated client coverage CEO, Commercial Banking

1 Represents the total revenue related to investment banking products sold to CB clients 2 Commercial Banking clients and prospects jointly covered by the CIB CAGR = Compound annual growth rate 53 2014 HIGHLIGHTS AND ACCOMPLISHMENTS

Performance highlights Business segment highlights Firmwide contribution Progress in key growth areas • Revenue of $6.9 billion • Middle Market Banking — • Commercial Banking clients • Middle Market expansion — • Grew end-of-period loans 8%; Fifth consecutive year of loan accounted for 35% of total Record revenue of $327 million; 6 18 consecutive quarters of growth; added more than 550 North American investment 19% CAGR since 2012 5 loan growth new clients banking fees • Investment Banking — Record 4 • Generated return on equity of • Corporate Client Banking — • $2.4 billion in treasury gross revenue of $2 billion; 6 18% on $14 billion of allocated Record gross investment services revenue 12% CAGR since 2012 4 capital banking revenue • Almost $120 billion in assets • International Banking — Record 7 • Continued superior credit quality • Commercial Term Lending — under management from revenue of $304 million; 13% 6 — net charge-off ratio of 0% Record quarterly originations; Commercial Banking clients, CAGR since 2012 full-year originations of nearly generating close to $500 1 $13 billion million in investment manage- Thomson Reuters as of year-end 2014. Traditional middle market is defined as Leadership positions • Real Estate Banking — Eighth ment revenue credit facilities of <$100 million from clients with <$500 million in revenue consecutive quarter of loan • $490 million in Card Services • Top 3 traditional middle 2 Federal Deposit Insurance Corporation 4 market syndicated lender 1 growth with a record $10 billion revenue data as of 3Q 2014 in originations 3 Greenwich Associates 2014 Online Services • #1 U.S. multifamily lender2 Benchmarking Study • Community Development 4 Investment banking and Card Services • J.P. Morgan ACCESS Online Banking — Originated more than revenue represents gross revenue gener- ranked the #1 cash manage- $1 billion in new construction ated by CB clients. Investment banking ment portal in North America includes Banking and Markets revenue. loans, building 9,000 units of Card Services includes Commercial Card 3 by Greenwich Associates affordable housing in nearly 90 and Paymentech revenue 5 cities within our footprint Calculated based on gross domestic investment banking revenue for syndi- cated and leveraged finance, M&A, equity underwriting and bond underwriting 6 Compound annual growth rate 7 Denotes overseas revenue from U.S. multinational clients

Non-performing Loans1 Net Charge-offs

 Commercial Banking  Commercial Banking

 Peer average2  Peer average2

TTC average3 Peers: 0.98% CB: 0.36% CB target: <0.50%

2008 20094 20104 2011 2012 2013 2014 2008 20095 20105 2011 2012 2013 2014 Peers 2.1% 4.2% 3.1% 2.0% 1.1% 0.6% 0.4% Peers 1.4% 2.2% 2.0% 0.8% 0.3% 0.1% 0.1% CB 0.9% 2.9% 2.0% 0.9% 0.5% 0.4% 0.2% CB 0.4% 1.0% 0.9% 0.2% 0.0%6 0.0%6 0.0%

1 Based on end-of-period loans 2 Peer averages include CB-equivalent segments or wholesale portfolios at BAC, CMA, FITB, KEY, PNC, USB, WFC 3 Through-the-cycle (TTC), 2008-2014 average 4 Excluding pre-acquisition Washington Mutual (WaMu) originations, Chase represented 1.67% in 2009 and 1.02% in 2010 5 Excluding pre-acquisition WaMu originations, Chase represented 0.93% in 2009 and 0.74% in 2010 6 Commercial Banking net charge-offs for 2012 and 2013 were 0.03%

54 Asset Management

Our research-based approach has led to 84% of our 10-year long-term mutual fund assets under manage- ment (AUM) placing in the top two performance quartiles and 228 of our mutual funds being 4- or 5-star rated. It is worth noting that our perfor- mance is not the result of strength in one particular asset class or region. It represents top-tier performance span- ning asset classes around the world. Client flows Clients around the globe vote with their feet, and they continue to entrust us with more of their assets every year. In 2014, our client assets Mary Callahan Erdoes grew to $2.4 trillion as we received an additional $100 billion in net At J.P. Morgan Asset Management, we clients. Our investment management long-term client asset flows. In fact, take great pride in the fact that so platform, for example, has a global since 2010, we have averaged $100 many institutions and individuals network of more than 600 portfolio billion per year in net long-term around the world entrust us to man- managers, 250 research analysts and client asset flows. age their money. Clients rely on our 30 market strategists. advice, ideas and solutions for some of their most meaningful life events, from saving for college or retirement % of 2014 Assets Under Management Over Peer Median1/Benchmark2 to securing their family’s future to sup- (net of fees) porting philanthropic and charitable 3-Year 5-Year 10-Year endeavors. With a heritage dating back nearly 200 years, we know how impor- Equity1 tant it is to earn clients’ trust, and we 77% 87% 83% recognize that it is our responsibility to re-earn that trust every day.

Our strong fiduciary culture enables Fixed Income1 us to stay focused first and foremost 50% 66% 85% on our top priority: long-term invest- ment performance. This core princi- ple of our business, combined with Multi-Asset advice-driven client coverage teams, Solutions1 has enabled us to build a leading 92% 85% 86% global client franchise that delivers superior investment strategies to our clients and strong financial perfor- Alternatives/ Absolute Return2 mance to our shareholders. 87% 95% 100%

Consistently reporting strong ¹ Represents the proportion of retail open-ended mutual fund assets that are ranked above peer category median investment performance for clients 2 Represents the proportion of GIM assets in mutual funds, commingled funds and segregated portfolios that are exceeding (net of management fees) their respective official benchmark. Excludes private equity, real assets and other longer-dated Success, both for our clients and our or closed-end investment strategies business, begins with our continuous For footnoted information, refer to slides 23 and 24 in the 2015 Asset Management Investor Day presentation, which is available on JPMorgan Chase & Co.’s website at http://investor.shareholder.com/jpmorganchase/presentations.cfm, under the investment in research for our heading JPMorgan Chase 2015 Investor Day, Asset Management, and on Form 8-K as furnished to the SEC on February 24, 2015, which is available on the SEC’s website at www.sec.gov. 55 We also have achieved 23 consecu- pre-tax earnings growth. Given ment to GWM, more than 50% of tive quarters of positive long-term the long-term approach we take to our assets come from clients with at AUM flows, a milestone that few, if running our business, we are even least $100 million entrusted with any, of our competitors can match. prouder of our sustained perfor- the firm. All of our clients, no matter Our active equity mutual fund flows mance over the past five years. the size of their relationship with ranked #2 in the industry in 2014, us, choose to work with J.P. Morgan GIM marking our third consecutive year because we take the time to get to ranking in the top three. In fixed Since 2009, GIM has a compound know their personal needs, and we income, we ranked #4 in long-term annual growth rate (CAGR) of 9% for can help them across both sides of active mutual fund AUM flows, and, revenue and 7% for pre-tax earnings. their balance sheet. importantly, we are the only firm That success is due, in large part, to that ranked in the top four in each our core strengths of being insight Continuously reinvesting for the of the past five years. driven, taking a long-term approach future and leveraging our global talent. Our Our success would not be possible Creating strong financial retail funds business has had impres- without continued reinvestment in sive asset gains, with five-year growth performance for shareholders the business – both to expand our of 120%. Our institutional business is We are proud of being able to deliver offering and to maintain a strong con- growing faster than the market in all such impactful results to our clients trol and risk environment. Our long- client channels – insurance, defined while, at the same time, delivering term commitment to building the best contribution, U.S. endowments and first-rate financial performance to our possible franchise means that we foundations, sovereign wealth funds shareholders. In 2014, we achieved always are focused on ways to improve and defined benefit. revenue growth of 5%, pre-tax income our business across all market cycles. growth of 5%, pre-tax margin of 29% GWM Adding top advisors to cover more and return on equity of 23%. It is an equally powerful story in clients GWM, where revenue and pre-tax Within the business, each of our We continue to invest in bringing on income have increased at a CAGR of client franchises – Global Investment world-class talent. Over the last five 8% and 7%, respectively, since 2009. Management (GIM) and Global years, we hired and trained hundreds We continue to differentiate our- Wealth Management (GWM) – con- of new advisors. Expanding our cli- selves in the marketplace as the firm tinues to deliver impressive growth. ent coverage teams enables us to help that can offer unparalleled insights In 2014, both businesses achieved more clients around the world who to help clients fulfill their vision. As record annual revenue and strong need investment expertise and long- an example of our clients’ commit-

Revenue Pre-tax Income ($ in billions) ($ in billions)

Global Wealth Management (GWM)  Pre-tax margin

Global Investment Management (GIM) $12.0  Pre-tax income $11.4 $10.0 31% $9.6 $9.0 29% 29% 29% 28% $8.0 26% $3.3 $3.5 $2.8 $2.8 $2.4 $2.5

2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014

56 term solutions. We have nearly SmartRetirement 2035 (S&P Target Date 2035)1 20,000 people serving clients in more than 130 countries across the globe,  Industry average +2.4% including 60% of the world’s largest  J.P. Morgan 15.7% pension funds, sovereign wealth 13.4% +0.9% funds and central banks; more than 11.4% +2.0% 10.5% 3,000 global financial intermediaries; 7.6% and many of the world’s wealthiest 5.7% individuals and families.

Leader in Alternatives 1 Year 3 Year 5 Year We are one of the leading alternatives 1 providers, with $214 billion in alterna- Fund and index performance as of 12/31/14. Fund performance is net of fees. SmartRetirement performance is reflective of U.S. select shares. S&P Target Date 2035 total return USD represents Total Return Index. Past performance is not indicative of future tives/absolute return client assets performance, which may vary. Industry average source: Morningstar, Strategic Insight and eVestment across our client franchises. That places us ahead of nearly all of the and absolute return-focused strategies before, and our commitment to first- largest players in this space. Much of to complement their portfolios. class business in a first-class way has our growth is due to our focus on created a franchise that would be GIM’s multi-asset solutions business innovating to meet client needs. In hard to replicate. It is a great privi- is designed to help clients in this 2014, we introduced more than 30 lege to be entrusted with so many cli- regard. The business has seen tremen- new strategies focusing on timely ent assets from around the world. In dous growth over the past five years, themes that include private technol- return, we are committed to working with a CAGR of 31%. That places us ogy late-stage equity, emerging hard every day to continue to gener- firmly in front of the industry aver- markets growth equity, specialty ate value for clients, shareholders age of 13%. Our momentum includes insurance and credit, liquid alterna- and employees. tives and infrastructure. having our SmartRetirement offering named 2014 U.S. Allocation Fund High-growth multi-asset solutions Manager of the Year by Morningstar, platform with seven of its nine vintages in the In 2015, we are faced with global cen- top decile over the past five years. tral bank policy divergence, regula- tory changes, complex geopolitical A strong position with room to grow Mary Callahan Erdoes issues and increasing market volatil- We are incredibly proud of how our CEO, Asset Management ity. Given this landscape, investors are business has evolved over the past looking for solutions providers who years, decades and centuries. We are can act quickly and offer go-anywhere doing more for clients than ever

2014 HIGHLIGHTS AND ACCOMPLISHMENTS

• Best Global Wealth • #1 Equity and Fixed Income • 2014 U.S. Allocation Fund • Best Asset Management Manager, Euromoney Global Private Bank Portfolio Management, Manager of the Year, Morningstar Company for Asia, The Asset Excellence Awards Euromoney • Top European Buyside Firm, • Best Private Bank for Asia • #1 U.S. Large Cap Core • #1 Institutional Money Market Fund Thomson Reuters Extel High-Net-Worth, The Asset Equity Manager of the Year, Manager Worldwide, iMoneyNet Institutional Investor • #1 Large Fund of Hedge • #1 Global Active Long-Term Mutual Funds Manager of the Year, Fund Flows, Strategic Insight Institutional Investor

57 Corporate Responsibility

All of these challenges come together in Detroit. In 2014, we made a $100 million, five-year commitment to the city’s economic recovery that brings together both business and philan- thropic resources to support and accelerate some of the most innova- tive efforts underway to revitalize an iconic American city. But we’re putting more than just our money to work; our people have significant expertise to offer, and, in 2014, we sent a dozen of our top managers from around the world to Detroit to work with local nonprofits. It’s a model we plan to replicate and expand in the coming years. Peter Scher Underpinning all of these efforts is A common challenge facing commu- the long-term economic vitality of the the belief that achieving meaningful nities around the world is the need world’s cities. impact requires us to apply the for greater economic growth and same standard to our philanthropic In 2014, we developed and expanded more widely shared prosperity. Creat- investments as we do to our business our programs with a focus on three ing more jobs, starting and expand- investments: a genuine commit- distinct challenges: ing businesses, and removing barriers ment to accountability, transparency to opportunity will not only benefit First, we are helping metropolitan and impact. society but, by extension, our firm. regions compete more effectively in To that end, we recently formed a the global economy. Through our At the core of our business, JPMorgan five-year partnership with the Urban Global Cities Initiative with the Brook- Chase is in a unique position to help Institute, one of the most well- ings Institution, we have expanded our clients navigate an ever more respected nonprofit research organi- our work to help cities in the United complex global economy and spur zations in the United States, to assess States, Europe, Asia and Latin America the growth that fuels their progress. our major philanthropic initiatives – develop strategies for increasing inter- We not only understand the chal- to analyze our efforts, produce inde- national trade and investment ties. lenges clients are facing, we have pendent research and strengthen our the skills, resources and expertise Second, we are helping cities around programs – further advancing our to make a meaningful difference in the world address one of their biggest commitment to maximum impact helping solve them. challenges: the need for a better for our communities and account- trained workforce to fill the millions ability to our shareholders. Our corporate responsibility work of jobs left open due to a shortage has the same objective – to use the We are very proud of our work over of applicants with the right skills. skills, resources and expertise of our this past year and are committed to Through our New Skills at Work firm to support the economic growth making our communities and our program, we are developing strate- and progress of our communities. firm even stronger. gies that align workforce training In recent years, we have sharpened with the skills employers seek and that focus. With millions of people are providing much-needed data to around the world migrating to urban strengthen workforce systems. areas, cities are fast becoming the key drivers of global economic growth – Finally, we are helping cities create and essential linchpins in expanding thriving small business sectors Peter Scher access to opportunity. So we have centered around high-growth indus- Head of Corporate Responsibility refocused many of our efforts on tries through our Small Business helping develop strategies to bolster Forward initiative.

58 Invested in Detroit the world that demonstrate success working In 2014, GCI introduced innovative research, with employers to articulate demand in growing including an analysis of the role foreign direct JPMorgan Chase has roots in Detroit going back sectors and training workers in those high- investment (FDI) plays in rebuilding metro econ- to the 1930s, supporting our clients and the com- demand areas. Here are some examples: omies, a report on the economic contributions munity through the investments, loans and other of foreign students to U.S. cities, an analysis of • In Houston, we co-chaired a task force com- services that are core to our business. And while the changing patterns of London’s exports, and posed of businesses, training programs and we recognize that the city’s challenges remain research on the global competitiveness of educational institutions that developed significant, JPMorgan Chase believes that Detroit Munich, Hong Kong and Mumbai. has the ingredients and intrinsic strengths to UpSkill Houston, a five-year plan to raise rebuild a vibrant, modern economy. awareness of middle-skill job opportunities, Supporting this new research, GCI held high- increase access to technical education and profile convenings around the world that In 2014, JPMorgan Chase launched a $100 million, training, and improve the alignment between brought together leaders from business, govern- five-year commitment to support and accelerate employers and education/training providers. ment and nonprofits to explore best practices the dynamic recovery that is underway in Detroit: and catalyze local action. GCI held meetings in • Community Development: We provided $40 Hong Kong, London, Louisville-Lexington, million in responsive, long-term investment Munich, Phoenix and Seattle — each of which capital to two leading community develop- attracted hundreds of participants interested in ment financial institutions to finance vital understanding how their metropolitan area was projects that often lack access to traditional developing trade and investment strategies. sources of capital. To transform knowledge about global trade and • Stronger Neighborhoods: Our support of the investment into local action, GCI launched the Detroit Land Bank Authority and our innova- Global Cities Exchange (GCX) — an academy for tive partnership with a local community bank cities seeking to develop and implement action- to provide rehabilitation loan financing are able global strategies. By the end of 2014, GCX accelerating the city’s ambitious efforts to had enrolled 28 cities, of which 12 had com- reduce blight and stabilize neighborhoods. pleted export strategies, and six were working on FDI strategies. • Workforce Readiness: We are helping the city • In Europe, we provided data-driven, country- strengthen its workforce system, build part- specific analyses that map the latest employ- nerships between employers and training ment trends and identify barriers to full and Small Business Forward programs, and give residents access to train- inclusive employment in the United Kingdom, Small businesses act as vital engines driving job ing in the skills employers are seeking. Germany, Spain and France. In conjunction creation and economic development, but many with U.K.-based Institute for Public Policy • Small Business Growth: We are partnering entrepreneurs lack access to the resources Research, we released a comprehensive with local nonprofits to help Detroit’s vibrant needed for growth. In 2014, JPMorgan Chase review of European jobs and skills. small businesses access the resources and launched Small Business Forward, a $30 million, expertise needed to get their businesses off • In New York City, we published a report that five-year initiative to catalyze small business the ground. identified high-growth employment sectors development in cities around the world. for middle-skill jobs and outlined recommen- Detroit’s recovery will take time, but we are We know that having a good business idea is dations to address the skills gaps impeding excited by the progress we have seen so far. only part of what it takes for entrepreneurs to employment in these industries. We sup- We’re in the city for the long term, and we will succeed. They also need access to investors, ported an innovative partnership among a continue to learn and adapt as we work with our training, facilities, customers and export oppor- large employer, a social service organization partners to help tackle Detroit’s challenges. tunities. Research has shown that these sup- and a community college that helps young ports become even more effective when they adults in a low-income community acquire the target clusters of small businesses working in credentials needed to secure a job in the New Skills at Work the same sector and geography. According to a expanding healthcare sector. study conducted by the Initiative for a Competi- In December 2013, we launched New Skills at tive Inner City and supported by JPMorgan Work, a $250 million, five-year workforce readi- Chase, businesses in well-established clusters ness initiative to close skills gaps in sectors Global Cities Initiative outpaced overall regional growth by more than where employers struggle to fill vacancies and The Global Cities Initiative (GCI), a joint project 300% between 2003 and 2011. to help job seekers access the education and launched by the Brookings Institution and training required for these positions. A key Small Business Forward supports nonprofits JPMorgan Chase in 2012, equips metropolitan component of the program is focused on around the world that provide small business clus- leaders with the data, policy ideas and networks research that provides actionable data to better ters with the critical resources they need to suc- needed to support the economic growth of met- understand the dynamics of labor markets. ceed. By helping regional economies build on their ropolitan regions through trade and investment. Based on those findings, we directed grants to core assets to develop thriving enterprises, we are support innovative nonprofit programs around strengthening communities across the globe.

59 2014 HIGHLIGHTS AND ACCOMPLISHMENTS

Developing local economies • Expanded the impact of the Supporting small business Promoting sustainable and communities Global Cities Initiative beyond the development investment United States and assessed the • Provided $2.6 billion to low- and • Provided $19 billion in new credit • Underwrote more than $2.2 global competitiveness of Euro- moderate-income communities to small businesses across the billion in green bonds — debt pean and Asian cities, convened through our community devel- United States and was recognized issuances where proceeds are leaders from around the world opment lending and equity as the #1 lender by units to directed toward environmentally and broadened the reach of the investments to build or preserve women- and minority-owned busi- beneficial or climate-friendly Global Cities Exchange network 35,100 units of affordable hous- nesses for the third consecutive purposes — in 2014. of cities (see previous page). ing, serve 5,000 students, create year by the U.S. Small Business • Provided founding sponsorship nearly 2,200 manufacturing jobs • Exceeded 560,000 hours of Administration. of NatureVest, an initiative of and serve 380,000 patients at volunteer service by JPMorgan • Launched Small Business Forward, The Nature Conservancy to healthcare facilities. Chase employees globally and a $30 million, five-year commit- attract investment capital to provided $3.3 million of technical ment to support small business conservation. • Implemented year one of the assistance to nonprofits through clusters that provide comprehen- firm’s New Skills at Work pro- Technology for Social Good, an • Invested $5 million through a sive support services to entrepre- gram, a $250 million, five-year initiative utilizing our employees’ new joint investment with the neurs (see previous page). initiative to strengthen local skills to develop technology U.K. government in Novastar workforce systems by providing solutions for the social sector. • Awarded $3 million to support Ventures to develop early-stage real-time data and supporting small businesses making a posi- businesses that provide essential partners to align training with Honoring U.S. military and tive impact in communities across basic services to underserved employer and job seeker needs veterans the United States through our Mis- communities in East Africa. (see previous page). sion Main Street Grants® program. • Continued our leadership of • Announced the first investments • Committed $5 million over two the 100,000 Jobs Mission, a through the Global Health Strengthening financial years to help underserved youth coalition of employers formed Investment Fund, an innovative capability across the United States obtain in 2011 that collectively hired financing vehicle structured by the skills necessary to build last- more than 217,000 U.S. veter- JPMorgan Chase and the Bill & ing careers and partnered with ans and military spouses by Melinda Gates Foundation, to other organizations to create the end of 2014 and raised its support the final development almost 50,000 summer jobs for hiring goal to 300,000 hires. and distribution of a new treat- teens and learning opportunities From 2011 through March ment for cholera and a powerful for more than 54,000 young 2015, JPMorgan Chase has diagnostic for tuberculosis. people in 14 cities. In 2014, we hired nearly 8,700 veterans. released a report highlighting Increasing transparency with • Supported research conducted best practices from our network stakeholders by RAND Corporation to capture of nonprofit partners and identi- • Launched the Financial Solutions the lessons and experiences • Convened senior business lead- fying opportunities to advance Lab, a $30 million, five-year from 100,000 Jobs Mission com- ers and leading national policy summer youth programs. initiative to identify, test and panies on integrating veterans groups to foster open conversa- expand promising innovations to into the private sector workforce. tions about Chase products, help Americans increase savings, policies and public policy mat- • Exceeded the first-year goal of improve credit and build assets. ters that impact, in particular, the firm’s $20 million, five-year The first Lab competition focuses low- and moderate-income com- commitment by deploying $8 on supporting solutions to help munities, communities of color million to help U.S. military vet- consumers manage their house- and people with disabilities. erans and their families develop hold finances. in-demand job skills, retain qual- • Released an Environmental and • Committed $35 million over two ity employment, increase college Social Policy Framework, after • Expanded The Fellowship Initia- years to support and expand graduation rates and connect to extensive engagement with exter- tive, a JPMorgan Chase college- proven financial capability pro- stable housing opportunities. nal stakeholders, to communicate access program for young men of grams with nonprofits globally, our approach to environmental color that provides academic, • Awarded more than 750 newly investing in the development of and social risks in our business. leadership and experiential learn- renovated, mortgage-free technology-driven products and ing opportunities for 120 student homes worth over $125 million services designed to meet con- • Collaborated with Ceres to Fellows in New York, Chicago and to veterans and their families sumer needs, the infrastructure engage a group of external Los Angeles to develop the knowl- since 2010. to expand the availability of these stakeholders in a dialogue edge, skills and networks needed products and services, and the focused on sharing perspectives to complete high school and research to evaluate and share and priorities to help us enhance succeed in college and beyond. best practices with the field. our approach to human rights. 60