2019 INVESTOR DAY TRANSCRIPT February 26, 2019 MANAGEMENT DISCUSSION SECTION Jason R. Scott Head of Investor Relations, JPMorgan Chase & Co. Good morning. Good morning. Good morning, everyone. I'm Jason Scott, I'm the Head of Investor Relations for JPMorgan Chase. I'd like to sincerely welcome you to Investor Day 2019 and thank you for coming to join us today. I know it's early. I know you had to navigate a construction zone with sidewalk bridges and sheds and barricades to get in the door even so I know you really want to be here or somebody forced you to come, but either way we're glad you're here. And now that you are through the gauntlet and in the room, I just want to ask you to stop for a second, look around, pause, for most of you this is the last time you will ever be in this building. A lot has happened here over the decades. This company has grown to what we are today, but I think it's pretty clear, you can see outside we meant it when we said a year ago we're taking this thing down and we're moving forward with the new headquarters. That's the right thing for JPMorgan Chase going into the future. But before we get a few years ahead of ourselves here, let's start with why you're here today? You're our largest shareholders, debt holders and you're the folks that write about us and analyze us every single day. So, you need to know what we're up to in really quite a lot of detail to even do your job. And so you'll get to hear from some of our business heads, hear them talk about what they do every day to make this company a leader across businesses, how they invest, think about long-term strategy and success. And you'll definitely hear about our leading financial performance and how we continue to drive value over time for you all. So now the only thing standing between you and all of that good stuff, just a few logistical items. First, breaks. For those of you online and in the room, we'll do the first two presentations before taking a short 15-minute break around 9:45 then another at 11:00 a.m. Then we'll pause for our traditional lunch with senior management at about 12:15 before concluding the day with remarks from our Chairman and CEO, Jamie Dimon. So hope everyone sticks around for the whole day. A lot of good stuff happening. Hope you listen to the presentations from all our businesses, ask lots of good questions. And now last but not least please turn off your phones or silence them now. And remember for those of you in the room when you ask a question, we've got thousands of people on the webcast, so please wait for the mic, introduce yourself, your name and your company. And don't forget to take a quick look at the forward-looking statements. So again, thanks very much for coming today. I also want that thank my partners to make this happen for the firm. Now let's go ahead and get started with our CFO, Marianne Lake. ............................................................................................................................................................................................................................ Marianne Lake Chief Financial Officer & Executive Vice President, JPMorgan Chase & Co. Good morning, everybody. Good morning. I will start the firm overview where I always do, by reminding you of the unwavering tenets and the operating principles of the firm. First, we are complete, global, diversified and at scale. We are committed to the completeness of our platform, importantly providing our customers with everything they need to properly operate their lives and their businesses. And we believe that this is a source of strength and diversified earnings through the cycle. We've said it before, but scale has never been more important. Scale isn't only necessary in order for us to serve our global clients, but it also helps create operating efficiency which is to our customers benefit, and whether we are a leader or whether we're a fast follower, we're able to disrupt at scale through unique product offerings and capabilities, through competitive pricing and rapid adoption. Next we operate with fortress principles writ large and that includes capital and liquidity, but also includes risk management, governance, conservative accounting and more. And finally, we are religious about investing over the long-term and not being distracted by the weather over the short-term. Our investment in customer experience and innovation is working and customer satisfaction is at or near all-time highs across all of our businesses. We believe that our ability to continue to invest through all parts of the cycle is also a core strength. So together these are the consistent operating principles. You've heard me say them year-after-year. And this is why we believe we have had and will continue to have leading financial performance. And 2018 was obviously no exception. You can see that on page two. 2018 was a record year, record revenue and record net income for the company but also for each of our businesses. And that is either with or without the benefit of tax reform. We saw nearly $112 billion of revenue last year, $32.5 billion of net income and a 17% return on tangible common equity. And on capital distribution, we delivered significantly higher net payouts over the last two years, have consistently increased our dividend, all while maintaining a CET1 ratio of 12%. So 2018 was another record year on an absolute basis. 2 So let's just spend a moment on a relative basis on page three. You can see that we continue to be a leader among peers across virtually all measures on the page and is driven, in large part, by the long-term investments we've been making. We have consistently invested. We've invested in customer experiences, adding bankers, advisors, opening new branches, entering new markets and innovating our products and services. But we don't take these leadership positions for granted. We do know that complacency is the enemy. And so we are also acutely focused now more than ever on eliminating and busting bureaucracy and waste, speeding up decision-making and time to market. So let's take a quick look at the strength of our client franchises and those leadership positions then on page four. As we said before, we serve over half of America, that's over 60 million U.S. households, including 4 million small businesses. We do business with more than 80% of Fortune 500 Companies in 100 markets globally. In the Commercial Bank we support 17,000 commercial and industrial clients as well as 34,000 real estate owners and investors. And we have relationships with more than half of the world's largest pension funds, sovereign wealth funds and central banks. In our Consumer Bank, within our footprint we have number one primary bank share. We are the leader in deposit growth and the number one U.S. credit card issuer. In the Corporate & Investment Bank, we're number one in global IB fees consistently, the leader in overall markets revenue, number one in U.S. dollar payments volume and top three in each of treasury services and custody. In the Commercial Bank we are the leading U.S. multifamily lender and our Commercial Bank clients accounted for $2.5 billion of investment banking revenue last year. And finally in Asset & Wealth Management, our number one Private Banking franchise in North America coupled with our strong investment performance in Asset Management contribute to consistently strong asset growth. So we are starting from a strong place but the only way to know if we are continuing to make progress day-by-day is to focus on market share which you can see on page five. And the upshot here on page five is that we have maintained or gained share across our businesses and where we've lost share it's been intentional, it's been in order to preserve returns or to a lesser extent because we walked away from business that was outside of our risk appetite. If we start with the CIB, you can see that we gained 60 basis points of share in IB fees year-on-year which is itself significant. And we gained share across all regions last year for the first time in 10 years. We've continued to grow share in markets revenue including in FICC where we were already at the high watermark as well as in the equities context, which had a record year given the investments that we've made. In CCB, we continued to grow our deposits more strongly than the industry. We've gained some share in credit card sales from a clear number one position, and our focus on card balances is paying dividends. And while you can see on the page that in headline terms, we have ceded overall share in mortgage, auto, and for that matter in Commercial Bank lending, in areas where we've chosen to we've seen growth at or above the industry. So in mortgage in the consumer purchase market, in auto with our manufacturing partnership and in the Commercial Bank in our expansion markets. In Asset & Wealth Management, we've maintained share in both active AUM and client assets. And from a standing start, you can see that last year we hit number four in U.S.