JPMorgan Chase & Co at UBS Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So this is the first JPMorgan investor-related public appearance since the January 25 announcement regarding expanded management roles. And so the first question I want to ask about this is, what do you think is the key takeaway for investors in terms of how JP is thinking about succession? And ultimately, honestly, it is really the biggest risk that's cited by investors when they think about the stock.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : And just one more question here. Given the combination of the Corporate & Investment Bank, or CIB, and the Commercial Bank, how does that speak to accelerating opportunities with what had been the typical CB client?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So one more housekeeping question before we get into how the lines of businesses are doing. The New York Community News had reignited the conversation about multifamily. And maybe a little bit of a history lesson would be useful here in terms of how JPMorgan came to be in New York City multifamily. But perhaps an update on how your multifamily portfolio is positioned.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Great. So I wanted to move on to the Consumer & Community Bank, or CCB. I really wanted to ask you how each line of business is doing so far in the year. So last year, card outstandings were up 17%. So as we think about your expectations for spend, account acquisition and normalization have evolved, how long can growth stay above normal? And how does JPMorgan, given all the investments you put in card anyway, define normal?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : You talked during the call about CCB being the biggest dollar driver of the year-over-year increase in expenses. Your brand strategy was in The Journal recently. And so I wanted you to touch or give us a little bit more detail on your branch strategy. And also card's a hot topic for many reasons, how you're approaching your card opportunities this year.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So before we move away from the CCB, I have to ask you about how the deposits are behaving. Clearly, CCB is -- or consumer deposits in general are where there's been a lag in terms of repricing. Perhaps talk a little bit about how the mix shift trends are shaping up so far this year and how pricing strategies and pricing demand is also shaping up. I mean, we're so focused on movements in the curve, but I'm sure my mom is not, right? So (inaudible)...

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : She...

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : I actually don't know. I think she's a [Truist...]

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So moving on to the CIB. We just heard from David Solomon at Goldman right before you. There's obviously this great hope of a big rebound in investment banking activity in '24. How are the pipeline shaping up so far? And how is the -- does the Fed delay in cuts impact when those pipelines free up?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : And we're now 2 months into the quarter. Could you give us perhaps an update on how the Markets business is doing?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Could I ask a little bit about the mix behind that down 5%, 10%, or too early?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Is there anything that you're doing in the business now in terms of optimization in anticipation of Basel III endgame? And I have a whole slew of questions for you there that I'll address later. But is there anything proactive that you could do now?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So we'll put a pin on that because I like where you're heading with that. But let's zoom out, Jeremy, and go back to the top of the house. So your latest disclosures noted that in the up 100 basis point scenario, your NII at risk is $2.4 billion. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2024 / 1:50PM, JPM.N - JPMorgan Chase & Co at UBS Financial Services Conference As we think about your guide for $88 billion in net interest income ex Markets and think about one less cut or whatever the forward curve tells us, should we think about the impact of each 25 bps as having a linear relationship with NII at risk? And how much should we think about the deposit dynamics here as a wildcard versus what's modeled?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : 6 cuts.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Got it. Great. I'm glad you put it all together.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Yes. Yes. You come out of the rabbit hole. I liked it. It seemed like a lot of your peers and yourselves are preparing for a much tougher economic scenario through your reserve building, expressed through your reserve building last year. And outside of loan growth, in card, of course, some actual losses and normalization, how should we think about your reserve-building dynamics given the macro outlook that we know today? It just feels like soft landing is the narrative, but it feels very booming and a little -- maybe where we're sitting in Miami, it's a little bit different. It's not America. But if we avoid a recession and card losses stabilize after normalization, how do you think about a reserve that still has a pretty high unemployment rate embedded in it?

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Got it. So I wanted to revert back to one of your favorite topics, Basel III endgame. Can't wait for the slides at Investor Day on this. I thought the response to my question was very interesting because JPMorgan is always far ahead in terms of optimization and planning for the future. And does your wait-and-see approach, is that indicative of the conversations that are being had in Washington in terms of the receptiveness that there potentially is to adjust Basel III endgame finalization from what was proposed? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2024 / 1:50PM, JPM.N - JPMorgan Chase & Co at UBS Financial Services Conference

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Plain reading will replace my Netflix movie that I have on queue.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So as of the third quarter, these statistics are always delayed. Your G-SIB score was 943, which would suggest a 5% surcharge or 50 basis points more than where you are today. Are you actively working on getting it back to a score that implies a 4.5% surcharge? Or will you just let it stay there now, given potential B-III endgame implications, and it might be pushed there anyway? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2024 / 1:50PM, JPM.N - JPMorgan Chase & Co at UBS Financial Services Conference

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So to DFAST. What's your read on the 2024 parameters? And would you revisit the $2 billion per quarter buyback sort of loose guide, so to speak, after DFAST? And you generate so much capital.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : So maybe my final question, and we also have an analog way for you guys to ask questions of Jeremy, the traditional mic. You always say you're overearning, okay? You've grown your balance sheet by 40% since 2019. I get that the pandemic dynamics were unique. I fully get the 20% return REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2024 / 1:50PM, JPM.N - JPMorgan Chase & Co at UBS Financial Services Conference on tangible common equity is not considered sustainable in banking, but you also did that with a 15% CET1. So since you're overearning, how do you plan to address the 17% ROTCE target at Investor Day? So we're factoring in a much larger balance sheet than when you first set that goal. Rates are likely not going back to 0, right? Arguably, we don't know what the neutral rate is. And the potential for higher capital minimums and RWA inflation.

Question: Erika Najarian - UBS Investment Bank, Research Division - Analyst : Great. Any questions in the audience before I let Jeremy go? All right. Great. Thanks so much.