JP Morgan Presents Overview At Morgan Stanley Conference, Highlighting Strategy And Performance

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 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.

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