Event Summary:

• Troy Rohrbaugh, Co-CEO of JPMorgan's CIB, attended Morgan Stanley's Financial Conference, interviewed by Betsy Graseck.
• Discussion focused on JPMorgan's (NYSE:JPM) recent organizational changes, market share, and growth strategies.
• Emphasis on the integration of the corporate and investment bank with the commercial bank into a new segment called CIB

Drivers of Segment Performance:

• Integration of commercial and investment banks aimed at synergies and holistic client coverage.
• Anticipation of increased wallet share with clients by growing alongside them.
• Industry-specific coverage across client segments to deepen relationships.
• Private credit business seen as a significant opportunity, leveraging JPMorgan's position.
• Commercial real estate growth without changing risk appetite, focusing on client selection and expanding services like deposits and payments.

Outlook and Inflection Points:

• Growth in wallet share expected to be more challenging but still achievable.
• Market share gains in fixed income and equities may slow down compared to the past decade.
• Nonbank financials increasing competition in the market share landscape.
• Volatility in markets expected to remain above pre-COVID levels, influencing revenue wallet.
• Banking trending up 25-30% year-on-year, better than the mid-teens expectation shared at Investor Day.
• Markets trending slightly better than mid-single digits year-on-year.

Specific Products and Strategies:

• Private credit: JPMorgan to deploy $10 billion of capital in direct loans, with potential to increase.
• Financing business seen as a counterpoint to lower volatility in fixed income.
• Geographical focus on India, the Middle East, and Japan for international expansion.
• Emphasis on being at the center of the private credit ecosystem, partnering with lenders and borrowers.

Inventory Changes:

• No specific inventory changes discussed, but a general strategy to be agile and responsive to market conditions.

Insights from Analyst Questions:

• Co-CEO model with Jen Piepszak allows for strategic decision-making and leveraging different perspectives.
• Basel III end game not yet released, but JPMorgan is planning for a better-than-expected outcome and ready to lean into business lines if favorable conditions arise.
• Commercial bank expense ratio expected to be higher than standalone due to the expense base of the historical CIB but still aiming for industry-leading efficiency.
• JPMorgan's financing revenues will show up in CIB net interest income and potentially in fixed income fees, depending on the structure of private credit activities.

This article was created with assistance from Tornado’s AI platform (ai.tornado.com).

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