Professional Documents
Culture Documents
JP Morgan 2023 Agm
JP Morgan 2023 Agm
Jamie Dimon,
Chairman and
Chief Executive
Officer
Across the globe, 2023 was yet another year of significant challenges, from the
terrible ongoing wars and violence in the Middle East and Ukraine to mounting
terrorist activity and growing geopolitical tensions, importantly with China. Almost
all nations felt the effects last year of global economic uncertainty, including higher
energy and food prices, inflation rates and volatile markets. While all these events
and associated instability have serious ramifications on our company, colleagues,
clients and countries where we do business, their consequences on the world at large
— with the extreme suffering of the Ukrainian people, escalating tragedy in the Middle
East and the potential restructuring of the global order — are far more important.
As these events unfold, America’s global leadership role is being challenged outside
by other nations and inside by our polarized electorate. We need to find ways to put
aside our differences and work in partnership with other Western nations in the name
of democracy. During this time of great crises, uniting to protect our essential
freedoms, including free enterprise, is paramount. We should remember that
America, “conceived in liberty and dedicated to the proposition that all men are
2
created equal,” still remains a shining beacon of hope to citizens around the world.
JPMorgan Chase, a company that historically has worked across borders and
boundaries, will do its part to ensure that the global economy is safe and secure.
In spite of the unsettling landscape, including last year’s regional bank turmoil, the
U.S. economy continues to be resilient, with consumers still spending, and the
markets currently expect a soft landing. It is important to note that the economy is
being fueled by large amounts of government deficit spending and past stimulus.
There is also a growing need for increased spending as we continue transitioning to
a greener economy, restructuring global supply chains, boosting military expenditure
and battling rising healthcare costs. This may lead to stickier inflation and higher
rates than markets expect. Furthermore, there are downside risks to watch.
Quantitative tightening is draining more than $900 billion in liquidity from the system
annually — and we have never truly experienced the full effect of quantitative
tightening on this scale. Plus the ongoing wars in Ukraine and the Middle East
continue to have the potential to disrupt energy and food markets, migration, and
military and economic relationships, in addition to their dreadful human cost. These
significant and somewhat unprecedented forces cause us to remain cautious.
2023 was another strong year for JPMorgan Chase, with our firm generating record
revenue for the sixth consecutive year, as well as setting numerous records in each
of our lines of business. We earned revenue in 2023 of $162.4 billion1 and net income
of $49.6 billion, with return on tangible common equity (ROTCE) of 21%, reflecting
strong underlying performance across our businesses. We also increased our
quarterly common dividend of $1.00 per share to $1.05 per share in the third quarter
of 2023 — and again to $1.15 per share in the first quarter of 2024 — while continuing
to reinforce our fortress balance sheet. We grew market share in several of our
businesses and continued to make significant investments in products, people and
technology while exercising strict risk disciplines.
Throughout the year, we demonstrated the power of our investment philosophy and
guiding principles, as well as the value of being there for clients — as we always are —
in both good times and bad times. The result was continued growth broadly across
the firm. We will highlight a few examples from 2023: Consumer & Community
Banking (CCB) extended its #1 leadership positions and grew share year-over-year in
retail deposits, credit card sales and credit card outstandings (adding close to 3.6
million net new customers to the franchise); the Corporate & Investment Bank (CIB)
1 Represents managed revenue.
3
maintained its #1 rank in both Investment Banking and Markets and gained more
than 100 basis points of Investment Banking market share; Commercial Banking (CB)
added over 5,000 new relationships (excluding First Republic Bank), roughly doubling
the prior year’s achievement; and Asset & Wealth Management (AWM) saw record
client asset net inflows of $490 billion, over 20% higher than its prior record.
We have achieved our decades-long consistency by adhering to our key principles and
strategies (see sidebar on Steadfast Principles on page 5), which allow us to drive
good organic growth and promote proper management of our capital (including
dividends and stock buybacks). The charts on pages 9–15 show our performance
results and illustrate how we have grown our franchises, how we compare with our
competitors and how we look at our fortress balance sheet. Please peruse them and
the CEO letters in this Annual Report, all of which provide specific details about our
businesses and our plans for the future.
I remain proud of our company’s resiliency and of what our hundreds of thousands of
employees around the world have achieved, collectively and individually. Throughout
these challenging past few years, we have never stopped doing all the things we should
be doing to serve our clients and our communities. As you know, we are champions of
banking’s essential role in a community — its potential for bringing people together, for
enabling companies and individuals to attain their goals, and for being a source of
strength in difficult times. I often remind our employees that the work we do matters
4
STEADFAST PRINCIPLES WORTH REPEATING (AND ONE NEW ONE)
Looking back on the past two+ decades — Third, while we don’t run the company Sixth, and this is the new one, we must be
starting from my time as Chairman and worrying about the stock price in the short a source of strength, particularly in tough
CEO of Bank One in 2000 — there is one run, in the long run we consider our stock times, for our clients and the countries in
common theme: our unwavering dedica- price a measure of our progress over time. which we operate. We must take seriously
tion to help clients, communities and This progress is a function of continual our role as one of the guardians of the
countries throughout the world. It is clear investments in our people, systems and world’s financial systems.
that our financial discipline, constant products, in good and bad times, to build
Seventh, we operate with a very important
investment in innovation and ongoing our capabilities. These important invest-
silent partner — the U.S. government —
development of our people have enabled ments will also drive our company’s future
noting as my friend Warren Buffett points
us to achieve this consistency and com- prospects and position it to grow and
out that his company’s success is predi-
mitment. In addition, across the firm, we prosper for decades. Measured by stock
cated upon the extraordinary conditions
uphold certain steadfast tenets that are performance, our progress is exceptional.
our country creates. He is right to say to
worth repeating. For example, whether looking back 10
his shareholders that when they see the
years or even farther to 2004, when the
First, our work has very real human American flag, they all should say thank
JPMorgan Chase/Bank One merger took
impact. While JPMorgan Chase stock is you. We should, too. JPMorgan Chase is a
place, we have outperformed the Standard
owned by large institutions, pension healthy and thriving company, and we
& Poor’s 500 Index and the Standard &
plans, mutual funds and directly by single always want to give back and pay our fair
Poor’s Financials Index.
investors, in almost all cases the ultimate share. We do pay our fair share — and we
beneficiaries are individuals in our com- Fourth, we are united behind basic princi- want it to be spent well and have the
munities. More than 100 million people in ples and strategies (you can see the prin- greatest impact. To give you an idea of
the United States own stocks; many, in ciples for How We Do Business on our where our taxes and fees go: In the last 10
one way or another, own JPMorgan Chase website and our Purpose statement in my years, we paid more than $46 billion in
stock. Frequently, these shareholders are letter from last year) that have helped federal, state and local taxes in the United
veterans, teachers, police officers, fire- build this company and made it thrive. States and over $22 billion in taxes outside
fighters, healthcare workers, retirees, or These allow us to maintain a fortress bal- of the United States. Additionally, we paid
those saving for a home, education or ance sheet, constantly invest and nurture the Federal Deposit Insurance Corporation
retirement. Often, our employees also talent, fully satisfy regulators, continually over $10 billion so that it has the resources
bank these shareholders, as well as their improve risk, governance and controls, to cover failure in the American banking
families and their companies. Your man- and serve customers and clients while sector. Our partner — the federal govern-
agement team goes to work every day lifting up communities worldwide. This ment — also imposes significant regula-
recognizing the enormous responsibility philosophy is embedded in our company tions upon us, and it is imperative that we
that we have to all of our shareholders. culture and influences nearly every role meet all legal and regulatory require-
in the firm. ments imposed on our company.
Second, shareholder value can be built
only if you maintain a healthy and vibrant Fifth, we strive to build enduring busi- Eighth and finally, we know the founda-
company, which means doing a good job nesses, which rely on and benefit from one tion of our success rests with our people.
of taking care of your customers, employ- another, but we are not a conglomerate. They are the front line, both individually
ees and communities. Conversely, how This structure helps generate our superior and as teams, serving our customers and
can you have a healthy company if you returns. Nonetheless, despite our best communities, building the technology,
neglect any of these stakeholders? As we efforts, the walls that protect this com- making the strategic decisions, managing
have learned over the past few years, pany are not particularly high — and we the risks, determining our investments
there are myriad ways an institution can face extraordinary competition. I have and driving innovation. However you view
demonstrate its compassion for its written about this reality extensively in the the world — its complexity, risks and
employees and its communities while still past and cover it again in this letter. We opportunities — a company’s prosperity
strengthening shareholder value. recognize our strengths and vulnerabili- requires a great team of people with
ties, and we play our hand as best we can. guts, brains, integrity, enormous capabili-
ties and high standards of professional
excellence to ensure its ongoing success.
5
MAPPING OUR PROGRESS AND MILESTONES
6
and has impact. United by our principles and purpose, we help people and institutions
finance and achieve their aspirations, lifting up individuals, homeowners, small
businesses, larger corporations, schools, hospitals, cities and countries in all regions
of the world. What we have accomplished in the 20 years since the Bank One and
JPMorgan Chase merger is evidence of the importance of our values.
Bank One
Bank One had been even busier on the acquisition front, especially across the United
States. By 1998, then Banc One had more than 1,300 branches in 12 states when it
announced a merger with First Chicago NBD, a Chicago-based bank created just
three years earlier by the merger of First Chicago and Detroit-based NBD. Now
headquartered in Chicago, the new Bank One became the largest bank in the
Midwest, second largest among credit card companies and fourth largest in the
United States. But the merger didn’t go as planned, with Bank One issuing three
different earnings warnings. In March 2000, Bank One reached outside its executive
ranks, and my tenure began as Chairman and CEO, working to overhaul the company
and help bring it back to profitability and growth.
The story begins ... A merger 20 years ago helped transform two giant banks
Fast forward to 2003, and another wave of consolidation was well underway in U.S.
banking. Most of the nation’s larger banks were trying to position themselves to be an
“endgame winner.” In the biggest deal, Bank of America agreed to buy FleetBoston
Financial Corp. for more than $40 billion. Those two banks — already amalgamations
of several predecessor companies — touted the breadth of their combined retail
branch network.
7
But they were hardly alone. In 2003, some 215 deals were announced among
U.S. commercial banks and bank holding companies for a total value of $66 billion,
according to Thomson Financial, which tracks merger data.
In July 2004, J.P. Morgan Chase and Bank One merged — as part of a 225-year
journey — to form this exceptional company of ours: JPMorgan Chase. At its merger
in 2004, the combined bank was the fourth largest bank in the world by market
capitalization. But with patient groundwork over the years — fixing systems and
upgrading technology, managing the notable acquisitions of Bear Stearns and
Washington Mutual (WaMu) and continuing to reinvest, including in our talent —
we have made our company an endgame winner.
In earlier years, banks worried about their survival. While the past two decades have
brought some virtually unprecedented challenges, including the great financial crisis
and a pandemic followed by a global shutdown, they did not stop us from
accomplishing extraordinary things. Our bank has now emerged as the #1 bank by
market capitalization.
Each of our businesses is among the best in the world, with increased market share,
strong financial results and an unwavering focus on serving our clients, communities
and shareholders with distinction and dedication. The strengths that are embedded in
JPMorgan Chase — the knowledge and cohesiveness of our people, our long-standing
client relationships, our technology and product capabilities, our presence in more
than 100 countries and our unquestionable fortress balance sheet — would be hard to
replicate. Crucially, the strength of our company has allowed us to always be there for
clients, governments and communities — in good times and in bad times — and this
strength has enabled us to continually invest in building our businesses for the future.
You can see from the following charts what gains and improvements we have
achieved along the way.
8
DRAFT 3.14.24–TYPESET; 4/4/24; v.24_JD_earnings_diluted_03
Earnings, Diluted Earnings per Share and Return on Tangible Common Equity
2005–2023
($ in billions, except per share and ratio data)
$48.3
$49.6
Net income
excluding reserve
release/build1
$16.23
$38.4
$39.1
$37.7
$36.4
$12.09
$10.72 $29.1
$26.9
$9.00
$24.4 $24.7 $24.4
24% $8.88
$21.3 $21.7 23%
22%
21%
$19.0 18%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net income Diluted earnings per share (EPS) Return on tangible common equity (ROTCE) Adjusted ROTCE excluding
ROTCE2 reserve release/build1
1 Effective January 1, 2020, the Firm adopted the Financial Instruments - Credit Losses accounting guidance. Firmwide results was 13.6% was 19.3% for 2020
excluding the net impact of reserve release/(build) of ($9.3) billion and $9.2 billion for the years ending
for 2017 and 18.5% for 2021
December 31, 2020 and 2021, respectively, are non-GAAP financial measures.
2 Adjusted net income excludes $2.4 billion from net income in 2017 as a result of the enactment of the Tax Cuts and Jobs Act.
GAAP = Generally accepted accounting principles
9
24_JD_TBVPS_03
$144.05
$113.80 $128.13
$110.72
$106.52
$92.01
4/7/24r1 3:00pm
$86.08
$63.83 $65.62
24_JD_Stock_Total_Return_03 $58.17
$71.53 $73.12
$66.11
$51.88 $60.98
$47.75 $56.33
$43.93
$39.83 $40.36 $39.36 $39.22 $51.44 $53.56
$36.07 $35.49 $48.13
$44.60
$38.68 $40.72
$33.62
$30.12
$27.09
$21.96 $22.52
$18.88
$16.45
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
This chart shows actual returns of the stock, with dividends reinvested, for heritage shareholders of Bank One and JPMorgan Chase vs. the Standard & Poor’s
500 Index (S&P 500 Index) and the Standard & Poor’s Financials Index (S&P Financials Index).
1 On March 27, 2000, Jamie Dimon was hired as CEO of Bank One.
10
24_JD_client franchises_08 4/8/24r1 1:00pm
DRAFT 03/29/24, TYPESET; 4/9/24r1 v. 24_JD_client franchises_08
# of top 75 MSAs with dedicated teams23 36 52 69 72 151 locations across the U.S. and 39 international
# of bankers 1,208 1,242 2,360 2,888 locations, with 16 new cities added in 2023
New relationships (gross) 24 NA NA 2,277 4,940 $2.2B revenue from Middle Market expansion
Average loans ($B) $48.1 $132.0 $223.7 $268.3 markets, up 45% YoY
Average deposits ($B) $66.1 $198.4 $294.2 $267.8 Credit, banking and treasury services to ~34K
Commercial Gross investment banking revenue ($B) 25 $0.6 $1.7 $3.0 $3.4 Commercial & Industrial clients and ~36K real
Banking Multifamily lending26 #29 #1 #1 #1 estate owners and investors
18 specialized industry coverage teams
#1 overall Middle Market Bookrunner in the U.S.27
Approximately 28,000 incremental affordable
housing units financed in 202328
JPMAM LT funds AUM performed 166 funds with a 4/5 star rating34
above peer median (10Y)29 NA 80% 90% 83% Business with 59% of the world’s largest pension
Client assets ($T) 30 $1.1 $2.3 $4.0 $5.0 funds, sovereign wealth funds and central banks
Traditional assets ($T) 30,31 $1.0 $1.9 $3.4 $4.4 #2 in 5-year cumulative net client asset flows35
Alternatives assets ($B) 30,32 $74 $207 $372 $411 Positive client asset flows in 2023 across all
Asset & Wealth Average deposits ($B) 30 $42 $135 $261 $216 regions and channels, with strength in liquidity,
Management Average loans ($B) 30 $27 $83 $216 $220 fixed income, equity, custody and brokerage
# of Global Private Bank client advisors 30 1,484 2,512 3,137 3,515 #2 in Active ETF AUM and flows
Global Private Bank (Euromoney)33 #5 #3 #1 #1 #1 in Institutional Money Market Funds AUM36
54% of Asset Management AUM managed by
female and/or diverse portfolio managers37
11
24_JD_new_renew_04
$3,186
$288
$331
$2,496
$2,410
$2,357 $227 $2,345
$2,307 $2,265
$2,263 $216
$2,144 $265 $641
$2,102 $258 $333 $205
$2,044 $244
~$1,900 estimated $250
$197 $480
$1,866 $274 $233 $239
$1,820 $399 $262 $226
$430
$326
$252 $615
$1,577 $275 $309 $368
$1,567
$1,494 $463 $440
$222 $590
$312 $252
$243 $281
$167 $1,926
$167 $136 $1,789
$1,693
$1,621 $1,619
$1,519
$1,392 $1,443
$1,264 $1,294 $1,346 $1,329
$1,231
$1,115 $1,158
$1,088
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Corporate clients Small Business, Middle Market and Commercial clients Consumers Government, government-related and nonprofits1
1 Government, government-related and nonprofits available starting in 2019; included in Corporate clients and Small Business, Middle Market and Commercial clients for prior years.
12
24_JD_assets entrusted_03.eps
$7,693
$1,095
Deposits and client assets1 $6,950
($ in billions) $6,580
$1,148
$5,926 $1,132 $1,306
$959 $7,693
$1,314
$4,820
$1,209 $1,095
$6,950
$4,227 $4,211 $718 $1,186 $6,580
$3,802
$3,617 $3,740 $3,633 $660 $679 $1,148
$5,292
$844 $5,926 $1,132 $1,306
$3,255 $464 $503 $618
$558 $4,488 $4,240
$3,011 $784 $792
$439
$2,681 $2,811 $398 $861 $757
$959
$3,781
$2,254 $2,424 $372 $824 $722 $1,314
$365 $755 $4,820
$1,935 $221 $3,258 $1,209
$361 $558 $730
$1,662 $214 $573 $4,227 $4,211 $718 $1,186
$2,783 $2,740
$191 $520 $648
$425 $3,802
$2,427
$364 $3,617 $3,740
$2,329 $2,376 $3,633
$2,353 $660 $679
$5,292
$2,061 $844
$1,743 $1,881 $1,883 $3,255 $464 $503 $618
$1,296 $558 $4,488 $4,240
$1,107 $1,513 $1,415 $3,011 $784 $792
$439
$2,681 $2,811 $398 $861 $757 $3,781
$2,254 $2,424 $372 $824 $722
$221 $365 $755
2005 $1,935
2006 2007 2008
$361 2009 2010 $730
2011 2012 2013 2014 2015 2016 2017 2018 $3,258
2019 2020 2021 2022 2023
$558
$1,662 $214 $573
$191 $2,783 $2,740
$520
Client assets Wholesale$648
deposits Consumer deposits
$425 $2,427
$364 $2,329 $2,376 $2,353
$2,061
$1,743 $1,881 $1,883
$1,107 $1,296 $1,513 $1,415
$33.2 $32.4
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$31.0
2020 2021 2022 2023
$28.6
$26.8
Client assets Wholesale deposits Consumer deposits $23.5 $23.2
Assets under custody2 $20.5 $20.5 $19.9 $20.5
$18.8
$15.9 $16.1 $16.9
($ in trillions)
$13.9 $14.9
$13.2
$10.7
$33.2 $32.4
$31.0
$28.6
$26.8
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $23.5
2017 $23.2
2018 2019 2020 2021 2022 2023
$20.5 $20.5 $19.9 $20.5
$18.8
$15.9 $16.1 $16.9
$13.9 $14.9
$13.2
$10.7
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
1 Represents assets under management, as well as custody, brokerage, administration and deposit accounts.
2 Represents activities associated with the safekeeping and servicing of assets.
13
4/7/24r1 3:00pm
24_JD_daily payment_05.eps
DRAFT 4/5/24: TYPESET 4/6/24r2 v. 24_JD_daily payment_05
56.6 124.8
52.6
52.6 113.4
113.4
49.2
49.2
45.7
45.7 102.4
102.4
More than 90.1
90.1
39.3
39.3
37.4
37.4 double 2010 82.4
82.4
34.6
34.6
32.7
32.7 72.1
72.1
62.3
62.3
55.0
55.0
4/8/24r1 1:00pm
n-class_peers_07
2016
2016 2017
2017 2018
2018 2019
2019 2020
2020 2021
2021 2022
2022 2023
2023 2016
2016 2017
2017 2018
2018 2019
2019 2020
2020 2021
2021 2022
2022 2023
2023
1 Based on Firmwide data using regulatory reporting guidelines prescribed by the Federal Reserve for US Title 1 planning purposes; includes internal
settlements, global payments to and through third-party processors and banks, and other internal transfers.
T = Trillions
JPMorgan Chase Exhibits Strength in Both Efficiency and Returns When Compared
with Large Peers and Best-in-Class Peers1
Efficiency Returns
Overhead ratio2 ROTCE
Efficiency Returns
JPM 2023 Best-in-class peer JPM 2023 Best-in-class all Best-in-class
overhead ratio overhead ratio3 ROTCE banks ROTCE4,6 GSIB ROTCE5,6
Consumer &
50% 50% 38% 28% 28%
Community
COF-DC & CB BAC–CB BAC–CB
Banking
Corporate &
59% 55% 13% 16% 16%
Investment
BAC-GB & GM BAC-GB & GM BAC-GB & GM
Bank
14
4/10/24r1 3:45pm
24_JD_fortress balance_10
DRAFT 3/4/24 – TYPESET: 4/7/24r1 v. 24_JD_fortress balance_10
Our Fortress Balance Sheet
2005–2023
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Liquid Assets3
($ in billions) 387%
350%
311%
159% 192%
152% 136% 132% 118% 129% 115%
90% 80% 106% 110% 70% 63% 77% 86%
$1,652
$1,437 $1,430 $1,447
$921 $860
$804 $745 $786 $768 $755
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Cash, deposits with banks, and investment securities ($B)4 Liquid assets ($B)
Average loans/Cash, deposits with banks, and investment securities (%) Average loans/Liquid assets (%)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net income applicable to common
stockholders ($B) $8.5 $14.4 $14.9 $4.7 $8.8 $15.8 $17.6 $19.9 $16.6 $20.1 $22.4 $22.6 $22.6 $30.7 $34.6 $27.4 $46.5 $35.9 $47.8
ROTCE (%) 15% 24% 22% 6% 10% 15% 15% 15% 11% 13% 13% 13% 12% 17% 19% 14% 23% 18% 21%
INTRODUCTION Page 2
• Summary of our 2023 results and the principles that guide us Page 2
• Celebrating the 20th anniversary of the Bank One/JPMorgan Chase merger Page 7
• Our extensive community outreach efforts, including diversity, equity and inclusion Page 21
— What we learned: A five-point action plan to move forward on the climate challenge Page 26
• Giving the bank regulatory and supervisory process a serious review Page 30
• The pressure of quarterly earnings compounded by bad accounting and bad decisions Page 36
MANAGEMENT LESSONS:
THINKING, DECIDING AND TAKING ACTION — DELIBERATELY AND WITH HEART Page 40
16
Update on Specific Issues Facing
Our Company
Each year, I try to update you on some of the most While we are investing more money in our AI capa-
important issues facing our company. First and bilities, many of these projects pay for themselves.
foremost may well be the impact of artificial intel- Over time, we anticipate that our use of AI has the
ligence (AI). potential to augment virtually every job, as well as
impact our workforce composition. It may reduce
While we do not know the full effect or the precise
certain job categories or roles, but it may create
rate at which AI will change our business — or how
others as well. As we have in the past, we will
it will affect society at large — we are completely
aggressively retrain and redeploy our talent to
convinced the consequences will be extraordinary
make sure we are taking care of our employees
and possibly as transformational as some of the
if they are affected by this trend.
major technological inventions of the past several
hundred years: Think the printing press, the steam Finally, as a global leader across businesses and
engine, electricity, computing and the Internet, regions, we have large amounts of extraordinarily
among others. rich data that, together with AI, can fuel better
insights and help us improve how we manage risk
THE CRITICAL IMPACT OF ARTIFICIAL and serve our customers. In addition to making
sure our data is high quality and easily accessible,
INTELLIGENCE
we need to complete the migration of our analyti-
Since the firm first started using AI over a decade cal data estate to the public cloud. These new data
ago, and its first mention in my 2017 letter to platforms offer high-performance compute power,
shareholders, we have grown our AI organization which will unlock our ability to use our data in
materially. It now includes more than 2,000 AI/ ways that are hard to contemplate today.
machine learning (ML) experts and data scientists.
We continue to attract some of the best and Recognizing the importance of AI to our
brightest in this space and have an exceptional business, we created a new position called
firmwide AI/ML and Research department with Chief Data & Analytics Officer that sits on our
deep expertise. Operating Committee.
Elevating this new role to the Operating Committee
We have been actively using predictive AI and ML
level — reporting directly to Daniel Pinto and me —
for years — and now have over 400 use cases in
reflects how critical this function will be going for-
production in areas such as marketing, fraud and
ward and how seriously we expect AI to influence
risk — and they are increasingly driving real busi-
our business. This will embed data and analytics
ness value across our businesses and functions.
into our decision making at every level of the com-
We’re also exploring the potential that generative
pany. The primary focus is not just on the technical
AI (GenAI) can unlock across a range of domains,
aspects of AI but also on how all management can
most notably in software engineering, customer
— and should — use it. Each of our lines of business
service and operations, as well as in general
has corresponding data and analytics roles so we
employee productivity. In the future, we envision
can share best practices, develop reusable solutions
GenAI helping us reimagine entire business work-
that solve multiple business problems, and continu-
flows. We will continue to experiment with these
ously learn and improve as the future of AI unfolds.
AI and ML capabilities and implement solutions in
a safe, responsible way.
Our people did a great job of respectfully manag- We have ongoing concerns about persistent
ing this transition, knowing that circumstances inflationary pressures and consider a wide
were particularly tough for our new colleagues, range of outcomes to manage interest rate
whom we tried to welcome with open arms. We did exposure and other business risks.
everything we could to redeploy individuals whose Many key economic indicators today continue
jobs were lost because of the merger (we directly to be good and possibly improving, including
hired over 5,000 people). Our approach has always inflation. But when looking ahead to tomorrow,
been to go into an acquisition knowing we can conditions that will affect the future should be
learn things from other teams, and in this case, considered. For example, there seems to be a large
we did: First Republic had done an outstanding job number of persistent inflationary pressures, which
serving high-net-worth clients and venture capital- may likely continue. All of the following factors
ists, and we are developing what is effectively a appear to be inflationary: ongoing fiscal spending,
new business for us following First Republic’s ser- remilitarization of the world, restructuring of
vicing model. We will serve these high-net-worth global trade, capital needs of the new green econ-
clients through a single point of contact, supported omy, and possibly higher energy costs in the future
by a concierge service model, across our distribu- (even though there currently is an oversupply of
tion channels — including more than 20 new gas and plentiful spare capacity in oil) due to a lack
J.P. Morgan branded branches. of needed investment in the energy infrastructure.
In the past, fiscal deficits did not seem to be
NAVIGATING IN A COMPLEX AND closely related to inflation. In the 1970s and early
POTENTIALLY DANGEROUS WORLD 1980s, there was a general understanding that
inflation was driven by “guns and butter”; i.e.,
In the policy section, we talk about how we may be fiscal deficits and the increase to the money
entering one of the most treacherous geopolitical supply, both partially driven by the Vietnam War,
eras since World War II. And I have written in the led to increased inflation, which went over 10%.
past about high levels of debt, fiscal stimulus, The deficits today are even larger and occurring in
ongoing deficit spending and the unknown effects boom times — not as the result of a recession —
of quantitative tightening (which I am more wor- and they have been supported by quantitative
ried about than most) so I won’t repeat those easing, which was never done before the great
views here. However, the impacts of these geopo- financial crisis. Quantitative easing is a form of
litical and economic forces are large and some- increasing the money supply (though it has many
what unprecedented; they may not be fully under- offsets). I remain more concerned about quantita-
stood until they have completely played out over tive easing than most, and its reversal, which has
multiple years. In any case, JPMorgan Chase must never been done before at this scale.
be prepared for the various potential impacts and
outcomes on our company and our people.
Therefore, we are prepared for a very broad range We seek to be engaged globally and carefully
of interest rates, from 2% to 8% or even more, manage complex countries and geopolitical
with equally wide-ranging economic outcomes — issues.
from strong economic growth with moderate infla- JPMorgan Chase does business in more than 100
tion (in this case, higher interest rates would result countries, and we have people on the ground in
from higher demand for capital) to a recession over 60 countries. In almost all those locations, we
with inflation; i.e., stagflation. Economically, the do research on their economy, their markets and
worst-case scenario would be stagflation, which their companies; we bank their government insti-
would not only come with higher interest rates but tutions and their companies; and we bank multina-
also with higher credit losses, lower business tional corporations, including the U.S. multina-
volumes and more difficult markets. Under these tional corporations within their borders. This is a
many different scenarios, our company would critical role — not only in helping those countries
continue to perform at least okay. Importantly, grow and improve but also in expanding the global
being prepared means we can continue to help our economy.
clients no matter what the future portends.
Many of these countries are quite complex with dif-
The mini banking crisis of 2023 is over, but ferent laws, customs and regulations. We are occa-
beware of higher rates and recession — not sionally asked why we bank certain companies and
just for banks but for the whole economy. even certain countries, particularly when countries
have some laws and customs that are counter to
When we purchased First Republic in May 2023
many of the values held in the United States.
following the failure of two other regional banks,
Here’s why:
Silicon Valley Bank (SVB) and Signature Bank, we
thought that the current banking crisis was over. • The U.S. government sets foreign policy. And
Only these three banks were offsides in having when it does, we salute. Wherever we do busi-
the toxic combination of extreme interest rate ness, we follow the law of the United States, as it
exposure, large unrealized losses in the applies in that country (in addition to the laws of
held-to-maturity (HTM) portfolio and highly the country itself), in all respects. Think of trade
concentrated deposits. Most of the other regional rules, sanctions, anti-money laundering and the
banks did not have these problems. However, we Foreign Corrupt Practices Act, among others. By
stipulated that the crisis was over provided that and large, these things help improve those coun-
interest rates didn’t go up dramatically and we tries. In most cases, the U.S. government does
didn’t experience a serious recession. If long-end not want us to leave because it agrees, gener-
rates go up over 6% and this increase is accompa- ally, that the engagement of American business
nied by a recession, there will be plenty of stress — enhances our relationships with other countries
and helps those countries themselves.
OUTREACH EFFORTS, INCLUDING For JPMorgan Chase, Detroit was an incubator for
DIVERSITY, EQUITY AND INCLUSION developing models that help us hone how we
deploy our business resources, philanthropic capi-
JPMorgan Chase makes an extraordinary effort as tal, skilled volunteerism, and low-cost loans and
part of our “normal” day-to-day outreach to equity investments, as well as how we identify top
engage with individual clients, small and midsized talent to drive successful business and societal
businesses, large and multinational firms, govern- improvements. I hope that, as shareholders, you
ment officials, regulators and the press in cities all are proud of our focus on promoting opportunity
around the world. This dialogue is part of the nor- for all, both within and outside our organization,
mal course of business but it is also part of build- which includes economic opportunity. Some of our
ing trust and putting down roots in a community. initiatives are listed below.
We believe that companies, and banks in particu- • Business Resource Groups. To deepen our cul-
lar, must earn the trust of the communities and ture of inclusion in the workplace, we have 10
countries in which they operate. We believe — and Business Resource Groups (BRG) across the com-
we are unashamed about this — that it is our obliga- pany to connect more than 160,000 participat-
tion to help lift up the communities and countries in ing employees around common interests, as well
which we do business. We believe that doing so as to foster networking and camaraderie.
enhances business and the general economic Groups welcome anyone — allies and those with
well-being of those communities and countries and shared affinities alike. For example, some of our
also enhances long-term shareholder value. JPMor- largest BRGs are Access Ability (employees with
gan Chase thrives when communities thrive. disabilities and caregivers), Adelante (Hispanic
and Latino employees), BOLD (Black employees),
NextGen (early career professionals), PRIDE
(LGBTQ+ employees) and Women on the Move.
In May 2023, we gathered with knowledgeable and influential • Public/private partnerships in scaling bankable projects.
people from the energy industry writ large to the government Scaling investments needs to happen both for commercially
and financial services arena in Scottsdale, Arizona, for an proven technologies (e.g., wind and solar) and for emerging
action forum. The goal was to explore various aspects of the technologies (e.g., green hydrogen, sustainable aviation fuel
climate challenge and try to devise effective solutions that and carbon capture). Developing “bankable” clean energy
could help lead to meaningful progress. The climate challenge projects will require the application of smart financial tools,
is immense and complex. Addressing it requires more than as well as further policy support. It will take public/private
making simplistic statements and rules; rather, energy partnerships and innovation to create catalytic forms of
systems and global supply chains need to be transformed capital that can step into these gaps, absorb first-mover
across virtually all industries. And there is also a deep need risks and provide the necessary funding. The cost of capital
for new research and development. Energy systems and is too high for some companies — and public funds ought
supply chains provide the foundation of the global economy to be deployed in a smart way that effectively attracts
and must be treated with care. private capital.
At the same time, the opportunity here is immense. The • Public education and engagement. Without question, clients
investment required to meet climate goals — estimated at over told us that public commitment to and investment in energy-
$5 trillion annually — could generate economywide growth and related infrastructure is one of the most important parts of
opportunity at a scale the world has not seen since the combating the climate crisis and running their businesses.
Industrial Revolution. Supporting the buildout of energy-related infrastructure with
speed and scale is critical. Public acceptance of building and
The task for industry, policymakers and finance is to help
advancing the infrastructure needed to meet climate goals is
formulate solutions that support the transition to a low-carbon
at the heart of progress. While the energy transition is poised
economy, balancing affordable, reliable access to energy with
to deliver benefits to communities across the world, securing
generating economic growth.
acceptance and support to build clean energy infrastructure
To find a way forward, we sought input from diverse at scale is challenging. Access to job-creating renewable
stakeholders in pursuit of a North Star. In Scottsdale and in energy projects can help rural communities thrive by
discussions with clients across industries about what’s needed advancing local economies. Ensuring public support and
to achieve a low-carbon economy, these five action steps and social license to operate requires better engagement
reforms were top of mind: strategies, including widespread stakeholder education about
the benefits of these technologies for local communities.
• Supportive government policy and leadership to advance
the transition. Policy that promotes favorable economic • Communication about concrete successes. Across
conditions to make the transition viable is a critical first step industries, market participants need to do a better job of
for clients. This includes government leadership via celebrating and championing concrete successes and
mandates, incentives or subsidies to support jobs and tangible milestones. This includes highlighting success
investment in the transition; actions on permitting and stories around emerging technologies and the complex
interconnection reform; and regulatory clarity and nature of the carbon transition. Stakeholders also should
certainty, especially around long-term investments. As one better convey the benefits of clean energy — across all
vital example, current grid infrastructure is insufficient to technologies — to help combat misinformation and foster a
accommodate the growth in renewables. more informed dialogue.
From Tallahassee to Miami and from Tampa to Palm Bay, Our support to government, higher education, healthcare
JPMorgan Chase has been committed to Florida for more than and nonprofit organizations:
130 years and has enjoyed being the bank for all communities. • We serve over 150 government, higher education, healthcare
Each year, we contribute billions of dollars to the economy, hire and nonprofit clients throughout the state, and over the last
and train local residents, help to revitalize neighborhoods and five years, we have provided more than $20.2 billion in credit
remove barriers to opportunity for Floridians across the state. and capital to them.
Our partnerships with businesses, nonprofits, government
• Our clients range from the city of Jacksonville to the Orlando
entities and community organizations have enabled us to drive
Utilities Commission, the University of South Florida, Broward
sustainable impact and help them achieve their goals. We
Health and the District School Board of Pasco County — a
couldn’t be more proud to help make opportunity happen
decades-long client.
in Florida.
• We are the lead treasury bank for the Wounded Warrior
This year, we forged a relationship with Inter Miami CF, one of
Project, one of the largest veteran service organizations in
the most recognizable sports teams in the world. Through this
the United States. Headquartered in Jacksonville, the
partnership and the newly named Chase Stadium, we’re
organization caters to wounded veterans and service
continuing to contribute to South Florida and its local
members who served in the military on or after 9/11.
communities. In Tampa, home to nearly 6,000 of our
employees, we’re triggering an additional $210 million in Our support to investment and middle-market banking
economic activity and creating over 660 local construction jobs clients:
through the renovation of our Highland Oaks campus and
• Over the last five years, we have provided in excess of $318
downtown Tampa office. We’re proud that one-third of all
billion in credit and capital to local clients, such as utility,
Floridians do business with us through deposits, credit cards or
technology and tourism companies.
a mortgage. Through each of our investments across the state,
we’re ensuring that residents have the resources and tools they • We have more than 12,500 large and midsized clients across
need to thrive. the state.
• We managed more than $70 billion in investment and annuity Our support as a local employer:
assets for local clients. • We employ more than 14,000 residents throughout the state,
including nearly 1,900 veterans and over 660 people with a
criminal background who deserve a second chance.
It’s good to remember that the United States has It is also important to recognize that the banking
the best financial system in the world, with diversi- system as we know it is shrinking relative to pri-
fied, deep and experienced institutions, from vate markets and fintech, which are growing and
banks, pension plans, hedge funds and private becoming increasingly competitive. And remember
equity to individual investors. It has healthy public that many of these new players do not have the
and private markets, transparency, rule of law and same transparency or need to abide by the exten-
deep research. The best banking system in the sive rules and regulations as traditional banks,
world is a critical part of this, and, integrated with even if they offer similar products — this often
the overall financial system, is foundational to the gives them significant advantage.
proper allocation of capital, innovation and the
To deal with this fluid environment, banks of all
fueling of America’s growth engine.
sizes develop their own strategies, whether to
This is not about JPMorgan Chase — we believe we specialize, expand geographically or embark on
can manage through whatever is thrown our way. mergers and acquisitions. There are certain banking
This is about the impact on all parts of the system services where economies of scale are a competitive
— from smaller banks to larger regional banks that advantage, but not all banks need to become bigger
may not have the resources to handle all of these to gain this benefit (there are many highly success-
regulatory requirements. It’s also about the effect ful banks that are smaller). What is clear is that
on the financial markets and the economy from the banks should be allowed to pursue their individual
rapidly growing shadow banking system, as well as strategies, including mergers and acquisitions, as
the ultimate impact on the customers, clients and they see fit. Overall, this process should be allowed
communities we serve. This is about what’s right to happen — it’s part of the natural and healthy
for the system. course of capitalism — and it can be done without
harming the American taxpayer or economy.
The banking and financial system is
While we all want a strong banking and financial
innovative, dynamic and constantly changing.
system, we should step back and assess how all the
The banking system is not static: There are startup regulatory steps we have taken measure up against
banks, mergers, successful upstarts and fintech the goals we all share. Since Dodd-Frank was signed
banks, and even Apple, which effectively acts as a into law in 2010, thousands of rules and reporting
bank — it holds money, moves money, lends money requirements written by 10+ different regulatory
and so on. Nonbanks are competing with tradi- bodies in the United States alone have been added.
tional banks, and, in general, this dynamism and And it would probably be an understatement to say
churn are good for innovation and invention — with that some are duplicative, inconsistent, procyclical,
success and failure simply part of the robust pro- contradictory, extremely costly, and unnecessarily
cess. Innovation runs across payments systems, painful for both banks and regulators. Many of the
budgeting, digital access, product extensions, risk rules have unintended consequences that are not
and fraud prevention, and other services. Different desirable and have negative impacts, such as
institutions play different roles, and, importantly, increasing the cost of credit for consumers (hurting
lower-income Americans the most).
• Reduce bureaucratic processes that provoke a We need a detailed review and probably a
tendency to herd mentality. For example, CCAR complete revamp.
is just a point-in-time stress test, and it can lull I know this might be wishful thinking, but now
you into a false sense of security — for refer- would be a good time to step back and have a thor-
ence, we do more than 100 stress tests each ough and candid review of the thousands of new
week. On interest rate exposure, focusing on rules passed since Dodd-Frank. After this review, we
the documentation of details may stop you from should ask what is it that we really want: Do we
thinking about big interest rate exposure. want to try to eliminate the possibility of bank runs?
Sometimes analyzing “what ifs” and fat tail risks Do we want to change and create liquidity rules that
is better than excessive and rigid models and would essentially back most uninsured deposits? Do
documentations. we want the mortgage business and leveraged lend-
ing business to be inside or outside the banking sys-
• Examine risks outside the regulatory system
tem? Do we want products that are inside and out-
that are rarely analyzed and largely unad-
side the banking system to be regulated the same
dressed. These risks include data and privacy,
way? Do we want to reasonably give smaller banks a
as well as consumer banking and payment sys-
leg up in purchasing a failing bank? And while Dodd-
tems, which are growing fast in the unregulated
Frank did some good things, shouldn’t we take a
market. In addition, there are potential risks
look at the huge overlapping jurisdictions of various
from private credit markets (which I talk about
regulators? This overlap creates difficulties, not only
later in the next section).
for banks, but for the regulators, too. Any and all of
• Let’s imagine what’s possible with real collabo- this is achievable, and, I believe, could be accom-
ration. Working together, we can improve how plished with simpler rules and guidelines and with-
the FDIC manages failing institutions, how to limit out stifling our critical banking system.
In previous letters, I have described the diminish- today, lead directors generally hold most of the
ing role of public companies in the American finan- authorities previously assigned to the chairman.
cial system. From their peak in 1996 at 7,300, The governance of major corporations is evolving
U.S. public companies now total 4,300 — the total away from guidance by governance principles that
should have grown dramatically, not shrunk. focus on a company’s relationship to long-term
Meanwhile, the number of private U.S. companies economic value toward a bureaucratic compliance
backed by private equity firms — which does not exercise. Good corporate governance is critical, and
include the rising number of companies owned by a little common sense would go a long way.
sovereign wealth funds and family offices — has
grown from 1,900 to 11,200 over the last two THE PRESSURE OF QUARTERLY
decades. This trend is serious and may very well
EARNINGS COMPOUNDED BY BAD
increase with more regulation and litigation
coming. Along with a frank assessment of the ACCOUNTING AND BAD DECISIONS
regulation landscape, we really need to consider: There is something very positive about detailed
Is this the outcome we want? and disciplined quarterly financial and operating
There are good reasons for private markets, and reporting. But company CEOs and boards of direc-
some good outcomes result from them. For exam- tors should resist the undue pressure of quarterly
ple, companies can stay private longer if they wish earnings, and it is clearly somewhat their fault
and raise more and different types of capital with- when they don’t. However, it is naïve to think that
out going to the public markets. However, taking a the pressure doesn’t exist because companies that
wider view, I fear we may be driving companies “disappoint” can face extensive criticism, particu-
from the public markets. The reasons are complex larly those with a new or young CEO. It’s possible
and may include factors such as intensified report- for companies to take short-term actions to
ing requirements (including investors’ growing increase earnings, such as selling more product
needs for environmental, social and governance cheaply at the end of a quarter, cutting certain
information), higher litigation expenses, costly investments that may be terrific but can show
regulations, cookie-cutter board governance, accounting losses in the first year or two, or just
shareholder activism, less compensation flexibility, deploying more aggressive accounting methods at
less capital flexibility, heightened public scrutiny times. Once shortcuts like this begin, people all
and the relentless pressure of quarterly earnings. over the company understand that it is okay to
“stretch” to meet your numbers. This could put you
Along with the universal proxy — which makes it on a treadmill to ruin. Obviously, a company should
easier to put poorly qualified directors on a board not resort to these tactics, but it does happen in
— the pressures to retreat from the public market the public markets — and it’s probably less likely in
are mounting. In addition, corporate governance the private markets.
principles are becoming more and more templated
and formulaic, a negative trend. For example,
THE HIJACKING OF ANNUAL
proxy advisors may automatically judge directors
unfavorably if they have a long tenure on the
SHAREHOLDER MEETINGS
board, without a fair assessment of their actual One of the reasons it is less desirable to be a public
contributions or experience. Another example is company is because of the spiraling frivolousness of
the constant battle by some proxy advisors who try the annual shareholder meeting, which has
to split the chairman and CEO role when there is no devolved into mostly a showcase of grandstanding
evidence this makes a company better off — in fact, and competing special interest groups. We should
Sources: FactSet, S&P Global Market Intelligence, Assets and Liabilities of Commercial Banks in the United States H.8 data, Financial Accounts of the United States Z.1 data, World Federation of
Exchanges, Pitchbook, Preqin and World Bank.
I always enjoy sharing what I’ve learned from Get on the road — it builds knowledge and
watching others, reading and experiencing through culture.
my own journey. I have frequently wondered about all the nonstop
road trips, client meetings, briefings, greetings,
BENEFITING FROM THE OODA LOOP bus trips, and visits to call centers, operating
centers and branches, regulators and government
The military, which often operates in extreme
officials, among others: Did they make a differ-
intensity of life and death and in the fog and
ence? The answer is absolutely yes because they
uncertainty of war, uses the term “OODA loop”
enabled a process of constant learning, assess-
(Observe, Orient, Decide, Act — repeat), a strategic
ment and modification of best practices — gaining
process of constant review, analysis, decision
insights from employees to clients to competitors.
making and action. One cannot overemphasize the
Employees will tell you what you are doing well or
importance of observation and a full assessment
poorly if you simply ask them, and they know you
— the failure to do so leads to some of the greatest
want to hear the real answer. Curiosity is a form
mistakes, not only in war but also in business and
of humility — acknowledging that you don’t know
government.
everything. Responding to curiosity allows other
A full assessment is critical. people to speak freely. Facts and details matter
and inform a deeper and deeper analysis that
To properly manage any business situation, you
allows you to continually revise and update your
need to perform a full and complete assessment
plans. This, of course, also means that you are
of it. In business, you have to understand your
constantly admitting prior mistakes.
competitors, their distribution, their economics,
their innovations, and their strengths and weak- You need to shed sacred cows, seek out blind
nesses. You also need to understand customers spots and challenge the status quo.
and their changing preferences, along with your
Very often companies or individuals develop nar-
own costs, your people and their skills. Then
ratives based upon beliefs that are very hard to
there’s knowing how other factors fit in, like tech-
dislodge but are often wrong — and they can lead
nology, risk, motivations … hope you get the point.
to terrible mistakes. A few examples will suffice.
For countries, you need a thorough grasp of their
Stripe, Inc. built a payments business by working
economies, strengths and weaknesses, population
with developers — something we never would
and education, access to raw materials, laws and
have imagined but might have figured out if we
regulations, history and culture. Research, data
had tried to seek out what others were doing in
and analytics should be at a very detailed level and
this area. Branches were being closed, both at
constantly reassessed. Only after you complete
Bank One and Chase, because the assumption
this diligent study can you start to make plans with
was that they would not be needed in the future.
a high degree of success.
We underinvested for years in the wealth man-
agement business because we were always
focused on the value of deposits versus invest-
ments. Question everything.
In past years, I have written extensively about pub- been, the world was generally on a path to becom-
lic policy issues. It is important to engage in these ing stronger and safer. When terrible events
conversations, particularly around domestic happen, we tend to overestimate the effect they
economic policy because policy matters. While will have on the global economy. Recent events,
JPMorgan Chase can execute specific plans to however, may very well be creating risks that could
improve outcomes for customers and communi- eclipse anything since World War II — we should
ties, there is no replacement for effective govern- not take them lightly.
ment policies that add to the general well-being of
February 24, 2022 is another day in history that
the country. A stronger and more prosperous
will live in infamy. On that day, 190,000 Russian
country will make us a stronger company.
soldiers invaded a free and democratic European
As CEO of this company, every year I visit numer- country — importantly, somewhat protected by the
ous countries around the globe. I meet with for- threat of nuclear blackmail. Russia’s invasion of
eign government leaders, presidents and prime Ukraine and the subsequent abhorrent attack on
ministers, business leaders, and civic and aca- Israel and ongoing violence in the Middle East
demic experts, which allows me to learn a signifi- should have punctured many assumptions about
cant amount about how public policy is executed the direction of future safety and security, bringing
around the world. It also reinforces some of the us to this pivotal time in history. America and the
critical values and virtues that are essential to a free Western world can no longer maintain a false
healthy country. sense of security based on the illusion that dicta-
torships and oppressive nations won’t use their
Every time I see the American flag, it reminds me
economic and military powers to advance their
of the values and virtues of this country and its
aims — particularly against what they perceive as
founding principles conceived in liberty and dedi-
weak, incompetent and disorganized Western
cated to the notion that all men and women are
democracies. In a troubled world, we are reminded
created equal. Talk with someone who has recently
that national security is and always will be para-
become a naturalized citizen or watch a ceremony
mount, even if its importance seems to recede in
where groups of people take the oath to America,
tranquil times.
and you will see extraordinary joy and newfound
pride. They now live free, with individual rights The fallout from these events should also lay to
protected by the Constitution and with their life rest the idea that America can stand alone. Of
and the well-being of their family and community course, U.S. leaders must always put America
protected by the U.S. military. As Americans, we first, but global peace and order are vital to
have much to be grateful for and much to defend. American interests. Only America has the full
capability to lead and coalesce the Western world,
If you read the newspaper from virtually any day
though we must do so respectfully and in partner-
of any year since World War II, there is abundant
ship with our allies. Without cohesiveness and
coverage on wars — hot and cold — inflation, reces-
unity with our allies, autocratic forces will divide
sion, polarized politics, terrorist attacks, migration
and conquer the bickering democracies. America
and starvation. As appalling as these events have
needs to lead with its strengths — not only its
Over the last 20 years, China has been executing We need to strengthen and rebuild the
a more comprehensive economic strategy than we international order — we may need a new
have. The country’s leaders have successfully Bretton Woods.
grown their nation and, depending on how you
The international rules-based order established by
measure it, have the first or second largest econ-
the Western world after World War II is clearly
omy in the world. That said, many question the
under attack by outside forces, somewhat weak-
current economic focus of China’s leadership as
ened by its own failures and inability to keep up
they don’t have everything figured out. While
with the increasingly complex world. This interna-
China has become the largest trading partner to
tional order relies on a web of military alliances,
many countries around the world, its own GDP per
trade agreements (e.g., World Trade Organization),
person is $13,000. And the country continues to be
development finance (e.g., International Monetary
beset by many economic and domestic issues.
Fund and the World Bank) and related global tax
China has its own national security concerns. The and investment policies and diplomacy organiza-
country is located in a very politically complex part tions (e.g., United Nations), which have evolved
of the world, and many of China’s actions have into a confusing and overlapping regime of poli-
caused its neighbors (e.g., Japan, Korea, Philippines, cies. You can now add to it the new issues of cyber
among others) to start to re-arm and, in fact, draw warfare, digital trade and privacy, and global
closer to the United States. It also surprises many taxes, among others.
Americans to hear that while our country is 100%
energy sufficient, China needs to import 10 million
While we hope the wars in Ukraine and in the I believe that many affected Americans are not
Middle East will end eventually (and, we hope, suc- angry at hardworking, law-abiding immigrants
cessfully from the standpoint of our allies), these and, in fact, acknowledge the critical role immi-
other critical economic battles could possibly con- grants continue to play in building this wonderful
tinue throughout our lifetime. If the Western world country. Rather, they are angry that America has
is slowly split apart over the next few decades, it not implemented proper border control and immi-
will likely be the result of our failure to effectively gration policies. It is astounding that many in
address crucial global economic challenges. Congress know what to do and want to do it but
are simply unable to pass legislation because of
PROVIDING STRONG LEADERSHIP partisan politics. Congress did come close on a
few occasions — and I hope they keep trying.
GLOBALLY AND EFFECTIVE
POLICYMAKING DOMESTICALLY Deliberate policies meant to drive healthy
growth are needed.
When you travel around the United States and talk
with people of all types and persuasions, there is a For over two decades, since 2000, America has
rather common refrain; namely, why are we help- grown at an anemic rate of 2%. We should have
ing foreign nations with the safety of their borders strived for and achieved 3% growth. Had we done
and economies when we are not doing a particu- so, GDP per person today would be $16,000
larly good job of protecting our own? While there is higher, which would, in turn, have paid for better
no moral equivalency in these arguments, they are healthcare, childcare, education and other
understandable. It is clear that many Americans services. Importantly, the best way to handle
feel we need to do a better job here at home our excess deficit and debt issues is to maximize
before we can focus over there. We can under- economic growth.
stand why some people living in this country, who
Growth policies include (the list could be very
have been neglected for decades, ask how their
long so I’ll just mention a few):
government can find the money for Ukraine and
other parts of the world but not for them. It is a • Consistent tax policies, conducive to both
reasonable question. employment and capital investment. Capital
investment is the primary driver of innovation,
From my point of view, our highly charged, emo-
productivity and, therefore, growth in America.
tional and political domestic issues are centered
Tax policies change too frequently, which causes
around 1) immigration and lack of border security
uncertainty and complicates long-term capital
and 2) the fraying of the American dream, particu-
investment decision making (I won’t bore you
larly for low-income and rural Americans who feel
with the details here). A bipartisan committee of
left behind amid the growing wealth and prosper-
Congress is probably required to fix this — and
ity of others around them. Please read the sidebar
the sooner the better.
on page 57, which I believe explains the legitimate
frustration of some of our citizens. And I agree
with them.
The heart and soul of the dynamism of America is human you don’t like them (which you do not see in autocracies). But
freedom — freedom of speech, freedom of religion, free we all know that democracy can be sloppy: Maintaining an
enterprise (capitalism), and the freedom and empowerment effective democracy is hard work. Democracy fosters open
brought to us by our democracy through the right to elect our debate and compromise, which lead to better decisions over
leaders. Free people are at liberty to move around as they see time (whether in government or in business). Intelligence is
fit, work as they see fit, dream as they see fit, and invest in effectively “crowdsourced” with constant feedback. Good public
themselves and in the pursuit of happiness as they see fit. This policy comes from good debate and analytics, guided by reason
freedom that people enjoy, accompanied by the freedom of coupled with a firm understanding of what you would like the
capital, is what drives the dynamism — economic and social — outcomes to be and complemented with an honest assessment
of this great country. of what is really happening.
Our civil liberties depend upon the rule of law, property rights, Even democracies can become stagnant, bureaucratic and self-
including intellectual property, and restrictions on government perpetuating. Good government does many admirable things,
encroachment upon these freedoms. Our Constitution and Bill but admitting to mistakes is often not one of them. It takes
of Rights secure our individual freedoms and reserve all rights civically engaged citizens and a strong free press to bring
to the individual other than those important but limited sunlight to issues and keep a nation strong.
authorities given to the government.
Autocratic societies by their nature subjugate the individual to
The issue of individual rights is not all or none or freedom ver- the state. By definition they are not meritocracies — they are
sus no freedom. There are, of course, terrible examples where more about “who you know,” and they exist to perpetuate the
individual rights were trampled upon, and the results were dev- existing ruling class. Their decisions are based on a completely
astating — both for the individual and for the economy — in East different calculation, and their decision-making process does
Germany, Iran, North Korea, Russia, Venezuela, to name a few. not encourage and, therefore, benefit from open
And there are many countries that protect individual rights and debate. Democracy means that it is immoral to subjugate
are on a spectrum closer to American values. Think of Europe, individual freedoms to state actors other than to protect the
for example. But even in some countries that have some of existence of the nation itself.
these rights, a lack of dynamism — often due to bureaucracy,
There are values that many of us hold dear, such as religion,
weak institutions and government, and corruption — is palpable
family and country. But none may be more important than the
and has clearly led to less innovation, lower growth and, in
freedoms that allow us to choose to live our life as we see fit.
general, a lower standard of living.
We should do more to applaud the virtue and amazing power of
Freedom must necessarily be joined with the principle of our freedoms.
striving toward equal opportunity. Equal opportunity is what
allows individuals to rise to the best of their ability — it also
means unequal outcomes. Equal opportunity is the foundation
for fairness and meritocracy. The fight for equality, which is a
good moral goal, should not damage the rights of the individual
and their liberties.
To fix problems, we must first acknowledge them. Despite incarcerated. Those who do run afoul of our justice system
decades of government programs and all the moralizing that generally do not get the second chance that many of them
surrounds them, we have not done a particularly good job deserve. Their exclusion from the workforce is not only unfair
lifting up our low-income fellow citizens. I may be wrong, but I to them but also results in an estimated $87 billion average
do believe this is tearing at the social fabric of America and is annual cost to the economy.
among the root causes of the fraying of the American dream.
Too many policies that are wrong — affecting housing and
The gap between low-wage and well-paid workers has been mortgage markets, healthcare, immigration, regulation,
growing dramatically. From 1979 to 2019, the wage growth of education and student lending, to name a few — are
the top 10% was nearly 10 times that of the bottom 10% — jeopardizing the opportunity for American citizens to succeed.
which, basically, had not increased at all. The growth of low- The people who suffer the most, throughout all of this, are not
income workers’ annualized real wages after the pandemic high-income individuals. I strongly believe that these outcomes
was, for the first time in decades, higher than the top 60%, but are destroying the concept of “fair” in America and are driving
that’s not enough. The net worth for the bottom 25% of populism and diminishing, if not eliminating, trust — not only in
households is $20,800, and the net worth for the bottom 10% government but in all our institutions. Simply put, the social
is essentially $0. This makes it increasingly difficult for low- needs of far too many of our citizens are not being met. We
wage workers to support their families. Of the 160 million should never accept these outcomes — we must fix them.
Americans working today, approximately 40 million are paid
There are two policy changes that I believe can have a dramatic
less than $15 per hour.
effect on jobs, growth and equality — and they go a long way
Low-income individuals bear far greater burdens than the rest toward repairing the frayed American dream. Let’s start by
of us. Nearly 40% of Americans don’t have $400 in savings to treating all jobs with respect. Even starter jobs, which are the
deal with unexpected expenses, such as medical bills or car first rung on the ladder of opportunity, bring dignity and create
repairs, which leads to financial distress. More than 25 million better social outcomes in terms of health, higher household
Americans don’t have medical insurance at all; of these, one in formation and lower crime. Of these two policy changes, one
five are in a family with income below the federal poverty level. would better utilize existing resources, and the other would
People who live in low-income neighborhoods also tend to have cost some money. But both would significantly change
worse health outcomes, including higher rates of mental health outcomes for low-income Americans.
issues, depression and suicide, and a lower life expectancy — as
The free one is so blindingly obvious that it’s almost
many as 20 years. Finally, low-income Americans generally
embarrassing to propose. Our schools (high schools,
experience higher unemployment and more crime.
community colleges and perhaps even four-year colleges)
No one can claim that the promise of equal opportunity is being should take responsibility for outcomes — they should be
offered to all Americans through our education systems. judged on the quality and income level of the jobs that their
Students in the lowest socioeconomic bracket are 50% less graduates and even non-graduates attain. This means providing
likely to attend college than those in the highest socioeconomic graduating students and other individuals with work skills (in
groups. Many inner city schools graduate under 50% of their fields such as advanced manufacturing, cyber, data science and
students — and even those who graduate may not be well- technology, healthcare and so on) that will lead to better paying
prepared for the workforce. In addition, boys growing up in the jobs. These schools should work with local businesses to
bottom 10% of family income are 20 times more likely to be replicate effective programs that are in place — because that is
where the actual jobs are now. This would be good for growth
and, as there are so many examples of successful programs, we
It’s been 20 years since the Bank One-JPMorgan Chase merger — and it’s been
an extraordinary journey. I can’t even begin to express my heartfelt appreciation
and respect for the tremendous character and capabilities of the
management team who got us through the good times and the bad times
to where we stand today. And I recognize that we all stand on the shoulders of many
others who came before us in building this exceptional company of ours.
Finally, we sincerely hope to see the world on the path to peace and prosperity.
Jamie Dimon
Chairman and Chief Executive Officer
April 8, 2024
59
Footnotes
Client Franchises Built Over the Long Term (page 11)
Note: figures may not sum due to rounding
1 Certain wealth management clients were realigned from Asset & Wealth Management (AWM) to Consumer & Community Banking (CCB) in 4Q20. 2005 and 2013
amounts were not revised in connection with this realignment.
2 Federal Deposit Insurance Corporation (FDIC) Summary of Deposits survey per S&P Global Market Intelligence applies a $1 billion deposit cap to Chase and
industry branches for market share. While many of our branches have more than $1 billion in retail deposits, applying a cap consistently to ourselves and the
industry is critical to the integrity of this measurement. Includes all commercial banks, savings banks and savings institutions as defined by the FDIC.
3 Barlow Research Associates, Primary Bank Market Share Database. Rolling 8-quarter average of small businesses with revenues of more than $100,000 and
less than $25 million. 2023 results include First Republic. Barlow’s 2005 Primary Bank Market Share is based on companies with revenues of more than
$100,000 and less than $10 million.
4 Total payment volumes reflect Consumer and Small Business customers’ digital (ACH, BillPay, PayChase, Zelle, RTP, external transfers, digital wires), non-digital
(non-digital wires, ATM, teller, checks) and credit and debit card payment outflows.
5 Digital non-card payment transactions includes outflows for ACH, BillPay, PayChase, Zelle, RTP, external transfers, and digital wires, excluding Credit and Debit
card sales. 2005 is based on internal JPMorgan Chase estimates.
6 Represents general purpose credit card (GPCC) spend, which excludes private label and Commercial Card. Based on company filings and JPMorgan Chase
estimates.
7 Represents GPCC loans outstanding, which excludes private label, American Express Company (AXP) Charge Card, Citi Retail Cards, and Commercial Card. Based
on loans outstanding disclosures by peers and internal JPMorgan Chase estimates.
8 Represents users of all web and/or mobile platforms who have logged in within the past 90 days.
9 Represents users of all mobile platforms who have logged in within the past 90 days.
10 Based on 2023 sales volume and loans outstanding disclosures by peers (AXP, Bank of America Corporation, Capital One Financial Corporation, Citigroup Inc.
and Discover Financial Services) and JPMorgan Chase estimates. Sales volume excludes private label and Commercial Card. AXP reflects the U.S. Consumer
segment and JPMorgan Chase estimates for AXP’s U.S. small business sales. Loans outstanding exclude private label, AXP Charge Card, Citi Retail Cards and
Commercial Card. Card loans outstanding market share has been revised to reflect a restatement to the 2022 reported total industry outstandings disclosed by
Nilson, which impacts annual share growth in 2023.
11 Inside Mortgage Finance, Top Owned Mortgage Servicers as of 4Q23.
12 Experian Velocity data as of FY23. Reflects financing market share for new and used loan and lease units at franchised and independent dealers.
13 Coalition Greenwich Competitor Analytics (preliminary for FY23). Market share is based on JPMorgan Chase’s internal business structure and revenue. Ranks
are based on Coalition Index Banks for Markets. 2006 rank is based on JPMorgan Chase analysis.
14 Dealogic as of January 2, 2024, excludes the impact of UBS/CS merger prior to the year of the acquisition (2023).
15 Client deposits and other third-party liabilities pertain to the Payments and Securities Services businesses.
16 Firmwide Payments revenue metrics exclude the net impact of equity investments; 2005 data represents Treasury Services firmwide revenue only. All other
periods include Merchant Services revenue.
17 Coalition Greenwich Competitor Analytics (preliminary for FY23) reflects global firmwide Treasury Services business (CIB and CB). Market share is based on
JPMorgan Chase’s internal business structure, footprint and revenue. Ranks are based on Coalition Index Banks for Treasury Services.
18 Institutional Investor.
19 Based on third-party data.
20 The Market Share number represents US dollar payment instructions for direct payments and credit transfers processed over Society for Worldwide Interbank
Financial Telecommunications (“SWIFT”) in the countries where J.P. Morgan has sales coverage.
21 Nilson, Full Year 2023.
22 Coalition Greenwich FY23 Competitor Analytics (preliminary). Rank is based on JPMorgan Chase’s internal business structure and revenue and Coalition Index
Banks for Securities Services.
23 Data in 2005 column is as of 12/31/2006.
24 New relationships (gross) exclude impact of First Republic acquisition.
25 Includes gross revenues earned by the Firm that are subject to a revenue sharing arrangement between CB and the CIB for Investment Banking and Markets’
products sold to CB clients. This includes revenue related to fixed income and equity markets products.
26 S&P Global Market Intelligence as of December 31, 2023.
27 London Stock Exchange Group, FY23.
28 Aligns with the affordable housing component of the Firm’s $30 billion racial equity commitment.
29 Percentage of active mutual fund and active ETF assets under management in funds ranked in the 1st or 2nd quartile (one, three and five years): All quartile
rankings, the assigned peer categories and the asset values used to derive these rankings are sourced from the fund rating providers. Quartile rankings are
based on the net-of-fee absolute return of each fund. Where applicable, the fund rating providers redenominate asset values into U.S. dollars. The percentage
of AUM is based on fund performance and associated peer rankings at the share class level for U.S.-domiciled funds, at a “primary share class” level to
represent the quartile ranking for U.K., Luxembourg and Hong Kong SAR funds and at the fund level for all other funds. The performance data may have been
different if all share classes had been included. Past performance is not indicative of future results. “Primary share class” means the C share class for European
funds and Acc share class for Hong Kong SAR and Taiwan funds. If these share classes are not available, the oldest share class is used as the primary share
class. Due to a methodology change effective September 30, 2023, prior results include all long-term mutual fund assets and exclude active ETF assets.
30 In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform
with the current presentation.
31 Traditional assets includes Equity, Fixed Income, Multi-Asset and Liquidity AUM Brokerage, Administration and Custody assets under supervision.
32 AUM only for 2005. Prior period amounts have been restated to include changes in product categorization.
33 Source: Euromoney.
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34 Percentage of active mutual fund and active ETF assets under management in funds rated 4- or 5-star: Mutual fund rating services rank funds based on their
risk adjusted performance over various periods. A 5-star rating is the best rating and represents the top 10% of industry-wide ranked funds. A 4-star rating
represents the next 22.5% of industry-wide ranked funds. A 3-star rating represents the next 35% of industry-wide ranked funds. A 2-star rating represents the
next 22.5% of industry-wide ranked funds. A 1-star rating is the worst rating and represents the bottom 10% of industrywide ranked funds. An overall
Morningstar rating is derived from a weighted average of the performance associated with a fund’s three-, five and ten- year (if applicable) Morningstar Rating
metrics. For U.S.- domiciled funds, separate star ratings are provided at the individual share class level. The Nomura “star rating” is based on three-year
risk-adjusted performance only. Funds with fewer than three years of history are not rated and hence excluded from these rankings. All ratings, the assigned
peer categories and the asset values used to derive these rankings are sourced from the applicable fund rating provider. Where applicable, the fund rating
providers redenominate asset values into U.S. dollars. The percentage of AUM is based on star ratings at the share class level for U.S.-domiciled funds, and at a
“primary share class” level to represent the star rating of all other funds, except for Japan, for which Nomura provides ratings at the fund level. The
performance data may have been different if all share classes had been included. Past performance is not indicative of future results.
35 Source: Company filings and JPMorgan Chase estimates. Rankings reflect publicly traded peer group as follows: Allianz, Bank of America, Bank of New York
Mellon, BlackRock, Charles Schwab, DWS, Franklin Templeton, Goldman Sachs, Invesco, Morgan Stanley, State Street, T. Rowe Price and UBS. JPMorgan Chase
ranking reflects Asset & Wealth Management client assets, U.S. Wealth Management investments and new-to-firm Chase Private Client deposits.
36 Source: iMoneynet.
37 Represents AUM in a strategy with at least one listed female and/or diverse portfolio manager. “Diverse” defined as U.S. ethnic minority.
JPMorgan Chase Exhibits Strength in Both Efficiency and Returns When Compared with Large Peers and
Best-in-Class Peers (page 14)
1 Bank of America Corporation (BAC), Citigroup Inc. (C), The Goldman Sachs Group, Inc. (GS), Morgan Stanley (MS) and Wells Fargo & Company (WFC).
2 Managed overhead ratio = total noninterest expense/managed revenue; revenue for GS and MS is reflected on a reported basis.
3 Best-in-class peer overhead ratio represents the comparable business segments of JPMorgan Chase (JPM) peers: Capital One Domestic Card and Consumer
Banking (COF-DC & CB), Bank of America Global Banking and Global Markets (BAC-GB & GM), Fifth Third Bank (FITB), Northern Trust Wealth Management
(NTRS-WM) and Allianz Group (ALLIANZ-AM).
4 Best-in-class all banks ROTCE represents implied net income minus preferred stock dividends of the comparable business segments of JPM peers, when
available, or of JPM peers on a firmwide basis when there is no comparable business segment: Bank of America Consumer Banking (BAC-CB), Bank of America
Global Banking and Global Markets (BAC-GB & GM), Wells Fargo & Company Commercial Banking (WFC-CB) and Morgan Stanley Wealth Management &
Investment Management (MS-WM & IM).
5 Best-in-class GSIB ROTCE represents implied net income minus preferred stock dividends of the comparable business segments of JPM GSIB peers, when
available, or of JPM GSIB peers on a firmwide basis when there is no comparable business segment: Bank of America Consumer Banking (BAC-CB), Bank of
America Global Banking and Global Markets (BAC-GB & GM), Wells Fargo & Company Commercial Banking (WFC-CB) and Morgan Stanley Wealth Management &
Investment Management (MS-WM & IM). WFC-CB is the only GSIB peer to disclose a comparable business segment to Commercial Banking.
6 Given comparisons are at the business segment level, where available; allocation methodologies across peers may be inconsistent with JPM’s.
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