Jpm at the Deutsche Bank Global Financial Services Conference

JUNE 2021

JPM AT THE DEUTSCHE BANK GLOBAL FINANCIAL SERVICES CONFERENCE

TRANSCRIPT June 2, 2021

MANAGEMENT DISCUSSION SECTION

Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Up next is JPMorgan. With us this year is Mary Erdoes, CEO of Asset & Wealth Management. This includes Private Banking or Wealth Management, as well as global institutional Asset Management and retail Asset Management. Client assets total $4 trillion. There's $14 billion roughly of revenues, and it's 10% to 15% of overall JPMorgan depending on what you’re looking at.

So, Mary, thank you so much for joining, and welcome to the conference...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. Well, thank you. JPMorgan is super proud to be part of this and very, very thankful that Deutsche Bank included us. So, thank you......

QUESTION AND ANSWER SECTION

Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q So, then we'll just jump right into the fireside chat format here. The firm overall continues to make a lot of investments year in, year out. Did recently increase the level of investment for this year. And I think many realize this is a key reason for the strong performance.

As I think about your world, clearly areas such as wealth, ESG, China, and just broadly speaking, technology are areas of focus. So, I do want to just dive into these and let's start with Wealth, which gets a lot of attention. You've been adding FAs. You've been leveraging technology to expand. Maybe you can give us a broad update on what's going on here...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yeah. Sure. We're really proud of the strong performance that the Wealth space has provided for the firm and especially in the Private Bank, the leadership position that it has around the world. I always say that if you want to have an understanding of all of JPMorgan Chase, you should become a Private Banking client.

I think that's really where we bring together the entire firm. We bring the institutional capital markets expertise of the world's best investment bank, the expansive reach of our commercial bank, sophisticated lending, structural tax, entity work, executive comp expertise. And then, of course, access to the outside managers where many of them are exclusive to us, some of the world's best hedge fund, private equity, real estate managers.

So it is very, very special part of our firm, and it's the reason I believe that it has such high market share in various parts of the world, as high as 10% or 15% in cities like New York or Madrid at the high end. But that's really nowhere near where we want to be in the high net worth part of the market, which is much, much more fragmented. And that's really one of the biggest opportunities across our firm is to continue to take that high end of what we do and just go all the way down...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q And talk about closing those gaps because I think you put some metrics out there, that the ultra-high net worth is roughly 2 times that of affluent and I think 4 times or even more that of the high net worth. So, how are you going to close that gap and is that reasonable to think that over time that gap can be closed? ......

Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yeah. One of the – I think one of the most special things we've done in this firm over the past couple of years is create a partnership across my line of business, the Asset & Wealth management business and the CCB, especially between the Private Bank and what we call Chase Wealth Management. It's really been one of our greatest successes. We've been able to empower the Chase advisor and the branch, and be able to provide them with the Private Banking products and services. And it's really – it's a finely-tuned machine.

Eric Tepper, who's at the helm of that, works super hard to give customers across all 4,872 branches the ability to have the investment help across what we do for the Private Bank, which has been a simplified version for the clients that walk into the branch. And we've tweaked it over time. We began really with just one balanced module. And today, it's a full range of brokerage, investment, insurance, advisory as a very fast-growing area.

To enable that scale, we've spent a lot of time on the modernization of all of the tools at the fingertips of the people and the branches from the CRM system to the goals-based planning. And we also spent a lot of time on intense training, so that we have the standard of care for our advisors who are out there.

The pandemic surprised us even more so. Since COVID began and the lockdown, we've had – 75% of our branches have been open every single day, some of them six days a week, and we're now in 48 states across the United States of America. So, it's just amazing, as stressful as it was and still is, what they've done with the gusto and the fortitude to help clients to navigate. I previewed it at the 2020 Investor Day that I thought this would be record growth of accounts, clients, revenues, and I underestimated really what it was.

As recently as now, we're averaging about 10,000 clients a month to become investment clients. And it's a real reminder to all of us the difference of an in-person interchange with clients, remembering that 70% of everything that we do in life is nonverbal communication. And I think that that's what's really translated itself to these results, which is also making me excited about the wholesale business. We've thankfully, just two weeks ago, opened up 55 offices across the United States of America finally. We've been travelling nonstop, Seattle, San Fran, L.A., Chicago, Texas, Miami, Boston, on my way next week to Geneva and Milan and any part of the EU that will let me in.

But – and so many clients are coming also here to New York. We've had a lot of international clients come in, several a day, and we're really excited that we're the first meeting that they've had, the first bank they've come into. So, that's making us feel quite proud. But this morning even I'm getting some other fields saying the limitations that we've got currently in place of 50% capacity in our offices are already being bumped up against.

So there's really – we just want to make sure that we can continue to keep up with the fact that people do want to be back in the office and working together, really high rates especially in places like Hong Kong, Shanghai where we're back at 70%...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q And it seems like everyone was trying to expand in wealth from a global perspective. Whether it's banks as globally focused as you or even just kind of more plain vanilla regional banks in the US, it's an area that everyone wants to expand. Do you think we'll see meaningful consolidation from here, or is it just going to stay fragmented especially on kind of...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A It's a – yeah. No, it's a very good question. I mean, wealth management is really one of the most fragmented parts of financial services. The top 10 firms globally only capture about 20% of the aggregate market share, if you think about that, compared to like Sales and Trading and Investment Banking where the top 10 firms have 65-ish, 50% market share respectively. So it's – I think it's going to stay very fragmented. Having said that, I think you're going to see meaningful consolidation at some of the higher end through both organic and inorganic efforts.

On the organic front, the largest managers just continue to grow. And it's just – it's harder to stay smaller and undifferentiated. If you just look at the past couple of years, the largest wealth management firms think about JPMorgan, Morgan Stanley, Schwab, Bank of America, et cetera. They increased market share by about 2 points or $6 trillion, the AUS grew about 23% in 2020 despite actually the global wealth contracting by about 3%. So, I think it's a tale of many cities.

I personally believe that the business ingredients for the successful endgame winners is a combination of a local presence, which I just mentioned is just so important in this business, plus a global reach and access which is equally important, and then the higher you go on the spectrum, the more important it is to deal with the whole balance sheet of a client.

Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A And so, first, you got to be able to connect locally and not just the offices across the United States of America and the branches, but also the 21 countries that we operate in around the world. Very few wealth management competitors actually have gotten that right. Some have chosen just to focus on the US and that's fine. But I believe in today's world, global is really – it's really an important component of this. And so, I think that's the winning formula. I don't know how you deal with things like global execution and money movement, inbound, outbound, on-the-ground research, cyber protection. I mean, we spent $12 billion in technology alone. It's super hard to keep up with that. So, I think all of those are part of the equation...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q And how about margins? Wealth is one of the areas where margins have held up, especially kind of in the upper end of the customer base here. What's your outlook on wealth management margins, obviously, keeping in mind how much competition there is out there right now? ...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yeah. I think that the margins are going to continue to be quite healthy on the ones that have the scale. Scale is the most important part. Everything else you're going to need to outsource. You'll see that change in outsourcing side of the business. But I think that the endgame winners and the ones that have those three ingredients, local presence, global reach, dealing with the whole balance sheet of the clients, loans, are a very, very important part of this equation. Those are the ones that we'll be able to take that and constantly reinvest and those reinvestments and making sure that the clients have everything at their fingertips from the digital access that is so critical, everything that used to be done in an old fashioned way. You won't stay up with the fintechs of the world and the like unless you're constantly reinvesting there...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q So every bank investor is waiting for loan growth to pick up in aggregate...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yes...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q In your world, it's actually been quite strong. Maybe you could just remind us what's driving that and how sustainable is the loan growth as you look out medium to longer term...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yeah. So the industry has had a hard time with – or harder time with loan growth recently. The Private Bank is an exception to that. It's the one area of the firm that continues to grow at a super healthy pace. Many of you asked at our Investor Day many years ago, is double-digit growth really sustainable? Isn't that too much risk? And what is it that you're doing to get it? And I pointed out two very important things. I said, one, we have a very small market share on this lending side. And so, there's plenty of room to grow and there's plenty of great clients out there that we don't provide lending to. And the second is that the majority of what we do is really balance sheet lending. Think about it as full recourse. Think about it as senior secured in most cases. And that's been resulting in these net charge-off rates of about 2 basis points roughly through time and our facility grades have remained fairly constant. And so, our loan growth is 17% year-over-year, and that's across the board. That's on mortgage. That's on lending. That's on margin. That's all regions, all channels.

And it's a very important reminder as you go up into the wholesale markets that it's just not a commodity part of what we do. Lending can be a commodity part in other places but not here. It's a very important part of the overall advice. You have to figure out how much you’re borrowing, if at all. You have to figure out where you hold it, how you hold it, how you structure it, what are the tax implications, what are the generational parts of how to think about transferring it.

Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A And with interest rates where they are right now, we're working as fast as we can to help clients through this whole thing. And for those of you who haven't done a GRAT, you think about these hurdle rates, these are really important times to think about assets that might appreciate and how do you get them tax efficiently to the next generation. And so, it's super exciting time for all of that...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q So switching to another area of focus, ESG. Obviously, it's very important to JPMorgan overall and your space. How important is ESG from a perception point of view, call it, more playing defense versus playing offense and also be able to monetize it for JPMorgan and the industry and clients? ...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yes. Well, ESG is a funny term. Personally, I believe it’s sort of strange to lump the three letters together. It's all – all three of them have always been a really important area of focus for our firm.

Let's just start with the G. The G is governance, right? You have to have good governance. It starts with the good governance of JPMorgan Chase. We spend an awful lot of time constantly refining that. And then, we take all those lessons learned of how we do it ourselves. And we apply that when we're evaluating each and every firm that we look at.

So, that's not new. And all of us as fiduciaries, and research analysts, and deep thinkers, we think constantly about is the governance setup right for the sustainability and the success of this company that we're all looking and investing in. So, that's not new. It's just thrown in and lumped in with the E and the S, I believe.

The S is really giving back to these communities and ensuring that the companies that you're investing in are ensuring that they're using their voice for change. Certainly inside JPMorgan Chase, we have a culture of diversity at every level. It makes it a really great place to work.

The makeup of our 259,000 employees and the respect that we have in the communities that we work in around the world – I think that really speaks for itself and speaks for the power of diversity. We've recently made a $30 billion commitment to racial inequities. And that's also including our partnership that we announced with Ariel Alternatives. And that's an effort to really make a difference in the Black and Latinx leadership roles and responsibilities across private companies in the US. And we're really excited about that. So, the S is equally important.

And then the E. And the E has two components. One, just from our firm's standpoint, we've recently leaned in very heavily here after signing the Paris agreement to get to net-zero by 2050. By the way, our own firm is already at a net-zero emissions as the output of what we have as a footprint for our firm. And we've made a very important $2.5 trillion environmental commitment over the next 10 years. And notably, a trillion of that is in the green space. So, we're excited about that.

But when you move over the asset management side, the asset management industry, I think the industry has a lot of work to do, just to get a common language and just to figure out how everyone's transparency is going to be absorbable by clients in the same sort of digestible fashion. And you understand what one company is saying versus another. I think many clients might be super surprised that their carbon readiness fund's top five holdings are Apple, Microsoft, Amazon, Google, Facebook.

So, I think that's just – there's a lot of progress we need to make to get it to where clients are putting their money where they want it and how they specifically want to make a difference in the world, not necessarily how an index provider wants them to make a difference in the world. And I think that's a big change that's coming.

Each and every one of our portfolio managers that we have across Asset Management is fully engaged in the research that they do with each CEO, each CFO, each strategic plan that they review with the clients that they're investing in and making sure that they hear that as part of what they're thinking about investing. So, that's fully integrated across everything we do on the research front around the world.

But clients are very hungry for this and much more so than I've ever seen in 25 years that I've been here at JPMorgan. And just across the Wealth Management side of our business, we've had 30 different funds be launched on our platform during the pandemic. And so, it's something we're spending a lot of time on.

Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A As a management team, we're spending a big portion of this helping clients. Our offsite last week on the Wealth Management side – spent a lot of time on that. And then this week actually we've been spending a lot of time on the Asset Management side on that offsite that we had. So it's – yeah, it is a lot in what we're doing and I think it's here to stay. I think people are going to start to be much more purposeful about their wealth...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q It does sound like there's a lot going on. That's helpful. Another growth area is China. And you recently announced plans to purchase China International Fund Management. I guess just to start with the basics, like, what exactly are you buying here, and is it going to be fully folded into JPMorgan or how will it be operating? ...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yeah. I think you're referring to the China Investment Fund Management Company, which we're really excited about the announcement we just made. So this year actually we're celebrating our 100th year anniversary in China. So I'd say it's after 100 years of being present and on the ground that we've finally been granted 100% ownership of a joint venture. So that's very exciting for us. I personally believe and I've said this quite often that it's actually at some point irresponsible to be an investor in today's world and not have the on-the-ground presence in China. But even if you never ever invest in China, to not understand the dynamics of what's happening with each and every one of the companies and how fast it's growing makes it almost impossible to truly understand the companies that you're investing in in your local country, wherever that is.

And so, China is already the number two bond market today. It's got a market cap of $30 trillion; it's closing in on the US that's $35.7 trillion. I think that's an even more impressive set of stack. If you look back over the past five years, the US five years ago was at almost $23 trillion. But China was only $8.2 trillion. And now, it's $30 trillion. And that's in five years. But they're still very, very low foreign ownership. Only 3% of the bond market is owned by foreigners on the onshore market, 8% is in Chinese government bonds. But the equity market, same story. Asia's market is a $12 trillion market. If you include Hong Kong, it gets up to about $18 trillion. It's a long distance from the US, which is about a $45 trillion market. But China is twice the size of the Japan market, it's three times the size of the London market, 25% of the global IPO activity across the Shanghai and Shenzhen exchanges. But the foreign holding of RMB is growing so rapidly. It's up about five times over the past five years. But in the MSCI indices, it's still only about 5% despite being it’s GDP is about 16% of the global GDP and it's about 9% of the market cap of stocks in the world. So, financial services is probably the best example of that.

The four largest banks in the world are in China. So, to not be understanding what's happening there and hopefully investing. And so, this joint venture is going to continue to help us in a very serious way. When you think about – just think about China. It's got three times the number of Internet users in the US. 40% of the population is already middle class, it's about 588 million people. It's expected to become 70%. That's another 453 million people. It's already the second largest contributor to the global growth of consumption. It's got 35% of the luxury goods market. It's the largest auto market. It's the second largest EV market. It's the third largest STEM graduates in the world or I think it's three times that versus the US. It's got the most patent filings. The unicorns in Beijing are about – I think it's like 93 versus San Francisco at about 68. 5 of the top 10 cities in the world are in China. Only 4 of the top 10 cities of the world are in the US.

So, personally I don't understand how you can't be there on the ground. But we're all set. We're at the culmination of our 17-year partnership here. It's going to be a game-changer for our growth. We're now ranked the number three China inbound fund manager with our AUM up from number six just last year. We're fourth in the domestic foreign manager. We're fourth in QDII. We're first in the mutual recognition of funds. We're first in the brand recognition. And we also – by the way, it's important to note, we announced a 10% strategic investment in China Merchants Bank Wealth Management, which is just another avenue for us to think about how we're going to grow.

So, China is just a really important part of the whole equation for us...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q Just as a follow-up. What will change going from a joint venture to 100% ownership? Is this kind of the launching point to spend more, to build it out, to capture more of the opportunity? Like, what's – I mean, I know it’s kind of like a simple question. But what changes when you assume full control? ......

Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A A lot changes. It changes your day-to-day control of what happens with your employees there. Let's just take a very simple example. The research analysts on the ground, today they are 51% owned by a foreign company and 49% owned by us. So, when we have our global research meetings every Monday morning, every Wednesday afternoon and we dial everybody in from around the world, that's not part and parcel of that. Just imagine when those people are the full JPMorgan employees and they become part and parcel of everything you're thinking about from a research standpoint, it's just going to change everything that we think about from how we incorporate research and the dynamics of what's happening around the world. Having access to the flows, having the direct understanding and the governance of everything I think is just equally important. It will be 100% governed in the JPMorgan first-class business and a first-class way. So I think it's going to be a game-changer for us...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q Switching topics, a theme that's been debated for some time, just the whole active versus passive debate and then somewhat related industry fee pressure more on the asset management side. We covered wealth before. First on the active versus passive. There's been momentum in active of late. How sustainable do you think this is after long-term trend towards passive? ...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yeah. I've been saying if there was ever a time for our industry where we had that like duh moment, it was 2020. And anyone who's been passive has really missed a lot. There's been an enormous amount of pivots and changes. And if you're sitting there holding on to the largest 500 stocks of yesterday, you are completely missing the way that you analyze the CEOs who are attacking this change and thinking about what to do versus the ones that are just sitting there like a deer in headlights. And the entire world has changed on a dime and it's not going back.

So, it's never been more important to be a research analyst in today's day and age. Just the ability to sit and digest what a CEO or a CFO are telling you about the future, not about all the stats from the past, is making all the difference. And I think those results have basically spoken for themselves. We've been number one in long-term active flows over the past year here. We're number two, as you know, from all of our publicly traded peers, active and passive, over the past five years cumulatively when you look at total client flows.

And clients need advice. I think a lot of us know these stats. But if you think about the average – a balanced portfolio, average balanced portfolio over the past 20 years is about a 6.5% return. The actual retail investor’s experience is less than 3%. Why? Because they don't have advice during the really hard times. And so, to think that today's sort of do-it-yourself investor who's got it all figured out and then is going to go long and short stocks like a professional manager and is not going to get caught up in those same sets of statistics over the next 20 years, I think we're kidding ourselves and I think that's why we are setting ourselves up to be an advice-driven company. And people pay for advice. They may not always think they need it, but over time they will eventually turn to a fiduciary who's been doing this for many decades and can help them through when they think about the power of compounding and investing over the long term. And they need people who are dedicated to deep research and to thinking about what are tomorrow's best and important companies, not necessarily just yesterday's...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q And do you think on the Asset Management, given the positive outlook for active and the performance and the flows and similarly, consolidation of pressure in margins which we've already seen, do you think we start to kind of flatten out here in the margins in Asset Management? ...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A From a margin standpoint, margins are – for my whole career, margins have been coming down, right, because they say that they're coming down in the industry because fees are coming down. How do you deal with that? You deal with fee pressure by just constantly improving what you do. And you only get fee pressure on commoditized things. You don't get fee pressure when you become a best-in-class provider and you add things on top of it. You need scale and you certainly need strong performance. But you also need further differentiation. You need to be able to offset all these pressure points with the scale with operational excellence.

Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A We have what I think is a very healthy margin, but the most important thing we do with that margin is we reinvest it right back in the company. And given the healthiness of what's happened to our business, I think that it's super important that just like I laid out in my annual letter, this is our biggest investment agenda ever. And we are relentlessly taking each of those dollars and we're investing them each and every day with ROI analysis, making sure that each component is held to all of the standards of what we've laid out, six-quarter walk, and each and every day making sure that we're not off – we're not off on what we're doing as we've laid it out, and that each one of them are delivering what we think is going to make a difference in this business...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q So, we've covered a lot of organic efforts that JPMorgan has in your segment. So, I think it's a good time to ask the M&A question. There has been a lot of consolidation really in different parts of your business in the industry. And JPMorgan as a firm overall has been pretty open about being more open to doing acquisitions. So, I guess the first question is, why haven't you done anything in your world? ...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A I wouldn't assume we haven't done anything. We've been doing a lot. We told everybody back at the 2020 Investor Day that this is going to be a trend. Again, I think I underestimated what a trend it would be. The value of deals the past year is up over 100%. I don't think it's a good idea to be sitting still. We've looked at about 70% more deals just in the past 12 months than the year before. That's a lot.

We have a very strong organic growth hand, and that organic growth right now is supercharged. It may not stay supercharged, but it's supercharged right now. And M&A especially in asset management is disruptive in the best of scenarios, right? It just is. It's not like a regular M&A transaction. Everything you do goes on watch. 100% of your assets are people. And people don't like that kind of change. So, if you're going to do it, it needs to be a really, really important one.

So, you got to kiss a lot of frogs, you got to be out there, but you always have to have a strong organic growth hand. And that's what's happening. But we closed our acquisition of 55ip at the end of December. It's been a great add-on. I think the trend for how you personalize advice from everything you just asked about from ESG and the like, I don't think people want to be told how to do that. I think people want to have their own voice and their own opinions, and I think things like that are going to be a very, very important part of the criteria...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q And as you think about the cultural integration, is there a priority to keep it under one brand or the multi-boutique model, is something like that something you would consider? Just trying to think of a way to get creative to add scale, but still keep some of the cultural uniqueness of firms that might be looking for a partner...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yes. That's a very good question. And some people have had success with that. JPMorgan won't do that. JPMorgan is JPMorgan. You want to become part of JPMorgan, you become part of the fabric. We've learned a lot over the many years of doing this in different ways, and I think that's something we have decided is not part of how we're going to operate...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. Q So, we're almost out of time here, but I did want to touch on you have very explicit long-term targets. The performance has obviously been very good, as you touched on before with the flows, and we've talked about the loan growth, the good cost control, which I didn't talk about, but it's been very good. But if we look at the next few years and the market returns are lower, do you still feel good about achieving your targets with the balanced business model really one of the ways to offset – obviously, if there's a huge decline in the market, it's going to be tough. But I think it's just the outlook for more modest returns that has people mindful that businesses like yours might be overearning and might be tougher going forward......

Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. A Yeah. We have talked for many years about constantly reinvesting in this business. And 2020 was a delivery year really showing that when you continue to invest purposefully and then cut every single cost you can as immediately as you can, we've delivered on that operating leverage after adjustments, it's about 1,000 basis points of operating leverage in the first quarter. We continue to work through our agile technology of digital acceleration. This past year has actually been a very important time to think about the daily routine from what's a heavily client-oriented business. Not flying around the world allows you to do a lot of maniacal focus on straight-through process, cutting manual work, bots, AI, machine learning, any excess – what you didn't see is the fact that we have had 30%, 40%, 50% increases in lots of different areas and that we didn't have the commensurate increase in headcount because we've been able to do that by streamlining. So, we are really excited about that.

We're also excited that margin increases have been able to allow us to reinvest in our talent. That's the most important thing we have, as I mentioned. It allows us to retain the best talent. It allows us to attract some of the best portfolio managers, research analysts, operational experts. So, we're hiring our digital, our data, China, ESG, everything you're talking about, we're able to reinvest. We're able to keep those margins. And this business is really just firing on all cylinders. It's delivering for the clients. That's most important as a fiduciary business, but it's also delivering for the shareholders...... Matt O'Connor Analyst, Deutsche Bank Securities, Inc. And I think that's a great place to end just like we started. Investments have driven a lot of strong performance over time, and it sounds like they will continue to do so. So, Mary, thank you so much for your time...... Mary Callahan Erdoes Chief Executive Officer of Asset & Wealth Management, JPMorgan Chase & Co. Thank you......

Disclaimer This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase & Co.’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2020, which has been filed with the Securities and Exchange Commission and is available on JPMorgan Chase & Co.’s website (https://jpmorganchaseco.gcs-web.com/financial-information/sec-filings), and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update any forward-looking statements.