JP Morgan Company Analysis: Leading Global Bank by Market Cap

JP MORGAN
COMPANY NAME DATE
JP MORGAN 28 October 2016
We initiate the unbias analysis of JPMorgan Chase & Co. after choosing it out of a selection of competitor bank for
the Investment Club in partnership with Silvertree Capital.

Overview
Sector
JPMorgan Chase & Co. is listed under the Financial: Banks on the Financial Times.
Company History
JPMorgan is one of the world’s oldest largest and best-known financial institutions, founded in 1799,
JPMorgan Chase & Co is built on the foundation of 1,000+ institutions which have come together over the
years to form the company today.
There have been a number of key Mergers and Acquisitions that have shaped JPMorgan & Chase Co. as we
know it today, these include:
o 1991 Manufacturers Hanover Corp merger with Chemical Banking Corp under name Chemical
Banking Corp
o 1995 First Chicago Corp. merger with NBD Bancorp to form First Chicago NBD
o 1996 The Chase Manhattan Corp merger with Chemical Banking Corp under name Chase
Manhattan Corp. Creating the largest bank holding company in the US
o 1998 Banc One Corp. merger with First Chicago NBD, under the name of Bank One Corp. Bank
One became the World’s largest Visa Credit card issuer.
o 2000 J.P. Morgan & Co Inc merger with The Chase Manhattan Corp. thus completing the
combination of four of the oldest money centre banking institutions in New York City into one firm
under the name of: J.P. Morgan Chase & Co.
o 2004 Bank One Corp merger with J.P. Morgan Chase & Co. Uniting investment and commercial
banking skills of JP with the consumer banking strengths of Bank One.
o 2008 JPMorgan Chase & Co acquisition of the Bear Steams Companies Inc. strengthening its
capabilities across a broad range of businesses.
o 2008 Acquired deposits, assets and certain liabilities of Washington Mutual’s banking operations
Locations reach of 42% of the US population.
o 2010 J. P. Morgan acquired full ownership of its U.K joint venture J.P. Morgan Cazenove, one of
Britain's premier investment banks.
Company Breakdown
JP Morgan offers a large selection of products and services, offered for a diverse group of clients such as;
Corporates, individuals, governments and institutions. Their services consists of; Investment banking (IB),
markets & investor research, treasury services, investment management, private banking, wealth
management and commercial banking.
The investment banking (IB) services for both corporations and institutions, where they in general offer
strategic advice, capital raising and risk management expertise.
In detail their investment banking unit is covered across many different industries and consists of; M&A
services for corporations and institutions, strategic advice, capital raising, risk management expertise and
corporate finance advisory. Also, their investment banking unit offers services in origination, equity capital
markets and debt capital markets.
In markets and investors services, JP Morgan offers their clients services in; Research, proprietary pricing
data and analytics, and trade execution across numerous assets. Including; Commodities, FX, Equities etc.
Treasury services, are solutions regarding all transaction functions such as; providing Cash Management,
liquidity, trade and escrow solutions. Solutions include; Liquidity Management, Payments & FX, Receivables
Management, Trade and Escrow.

Investment Management, is offered for individuals, advisors and institutions. Where clients can benefit
from providing strategies and expertise for investment decisions across numerous asset classes.
JP Morgan also offers more traditional banking services in:
Commercial Banking, where services include; Real-estate banking, Credit and financing, treasury services,
global banking.
Furthermore, JP Morgan offers tailored banking solutions for individuals in the form of private banking and
wealth management
Key Products and Services that JPMorgan Chase & Co. offer include:
Consumer & Community Banking (Performance; ROE 16%)
o Consumer & Business Banking, Mortgage Banking
o Card Commerce Solutions & Auto
Corporate & Investment Banking (Performance; ROE 17%)
o Investment Banking
o Treasury Services
o Lending
o Fixed Income
o Equity Markets
o Securities Services
Commercial Banking (Performance; ROE 18%)
o Middle Market Banking
o Corporate Client Banking
o Commercial Term Lending
o Real Estate Banking
Asset Management (Performance; ROE 24%)
o Global Investment Management
o Global Wealth Management
Ownership
Major Shareholders of JPMorgan Chase & Co. include:
Name
JPM Shares
Held
% Total
Shares Held
Relevant companies owned by shareholder
Vanguard Group
Inc
229,636,598 6.36
JPMorgan Chase and Co
Wells Fargo & Co
Bank America Corp
Citigroup INC
Goldman Sachs Group inc
Morgan Stanley
State Street Corp 150,659,066 4.17
Wells Fargo & Co
Bank America Corp
Citigroup INC
Morgan Stanley
Capital World
Investors
109,635,004 3.04
Wells Fargo & Co
Capital One

JPMorgan and Chase’s largest shareholders all have shares in other large banking companies that
offer investment banking services implying a potential market expertise in financial institutions.
CEO
Jamie Dimon has extensive experience within the Banking Industry;
Prior to his appointment as CEO and chairman of he was President and COO of JPMorgan Chase, Chairman
and CEO of Bank One (Acquired by JPM) and held a wide range of executive roles at Citigroup, the Travelers
Group, Commercial Credit Company and American Express Company.
Jamie Dimon became the CEO of JPMorgan Chase in 2005 and Chairman of the Board in the following year.
Jamie Dimon was a Class A board member of the Federal Reserve Bank of New York from 2008-2013 until his
term ended
With his wealth of experience it is safe to assume that Jamie Dimon is familiar coping with the high
expectations of large investors and understands the opportunities and challenges associated with running a
huge financial institution; and although the nature of the business lends itself to occasional poor judgment,
it can be argued that Mr Dimon is a very suitable candidate for the job.
Citigroup
BlackRock Fund
Advisors
108,421,683 3.00
Wells Fargo & Co
Bank America Corp
Fidelity
Management and
Research
Company
79,149,460 2.19
Wells Fargo & Co
Capital One
Wellington
Management
Company LLP
68,522,209 1.90
Wells Fargo & Co
Bank America Corp
Citigroup Inc
T. Rowe Price
Associates, Inc.
60,244,434 1.67
Morgan Stanley
Wells Fargo & Co
Bank of America Corp
Northern Trust
Investments N A
49,733,999 1.38
Wells Fargo & Co
Citigroup
Bank America Corp

12 Month Share Price Information
White JPM US Equity
Green GS US Equity
Pink HSBA LN Equity
Red BARC LN Equity
Orange MS US Equity
Blue BAC US Equity
Grey C US Equity
Market Cap
As we can see from these results JP Morgan’s market
cap is at 247.38bn USD, which is at an all, time high.
Its market cap is forecasted to continue increasing
according to JP Morgan’s CFO in the Q3
videoconference. Compared to its competitors it’s
largely in the lead. If we look at JP Morgan’s biggest
rival which is bank of America and Citigroup which
have similar market share. However JPM market cap
is 77bn USD and 103bn USD greater than bank of
America and Citigroup respectably. This figure is
appealing to shareholders and investors as this
reduces the risk of investing into JP Morgan.
Company Market Cap (US Dollars)
Barclays 31.04bn
Morgan Stanley 63.93bn
Goldman Sachs 70.82bn
Citigroup 144.02bn
HSBC 152.69bn
Bank of America 170.11bn
JP Morgan 247.38bn

Normal Market Size
On average, over the past 90 trading days 14.77 Million JPMorgan & Chase were traded.
Company
90 Day Average Daily
Volume
Shares Outstanding
JPMorgan & Chase 14.77 Million 3.612 Billion
Bank Of America Corp 88.60 Million 10.205 Billion
Wells Fargo & Company 24.3 Million 5.046 Billion
CitiGroup 19.72 Million 2.905 Billion
Goldman Sachs 2.94 Million 405.462 Million
Morgan Stanley 13.20 Million 1.912 Billion
Deutsche Bank 8.19 Million 1.379 Billion
JPMorgan & Chase Co. is in the middle of the pack in regards to trading volume amongst its competitors
therefore indicating that it has a lower market liquidity than its competitors, however, it’s lower trading
volume in comparison to its closer rivals Wells Fargo and bank of America Corp may be reflective of the
number of outstanding shares for each company. JPMorgan and Chase has less thus a potential reason for
the lower Average Daily volume.
Another point worth considering is that a Lower Average Daily volume may indicate that traders view
JPMorgan & Chase as more of a buy and hold stock than its competitors – less trade volume stemming from
the fact that those who own the stock are less willing to sell.
Market Analysis
Main Competitors
Goldman Sachs
Morgan Stanley
Citigroup
Wells Fargo and Company
Deutsche Bank
Bank of America Corporation
*Formulated taking into account key products and services and Market Cap data

Customer Base
Revenue from Business segments are determined by presence of willing and able customers thus revenue
data can indicate customer base.
Business Segment
Total Net Revenue (millions, $)
2015 2014 2013
Consumer & Business Banking:
Consumer Banking / Chase Wealth
Management
Business Banking
17983
(103%)
18226
(105%)
17412
(100%)
Consumer & Community Mortgage Banking:
Mortgage Production
Mortgage Servicing
Real Estate Portfolios
6817
(67%)
7826
(76%)
10236
(100%)
Consumer and Community Card, Commerce Solutions &
Auto:
Card Services
Credit Card
Commerce Solutions
Auto & Student 19020
(101%)
18316
(97%)
18889
(100%)
Corporate and Investment Banking:
Investment Banking
Treasury Services
Lending
Markets & Investor Services:
Fixed Income Markets
Equity Markets
Securities Services
Credit Adjustments & Other
33542
(97%)
34595
(100%)
34712
(100%)
Commercial Banking:
Middle Market Banking
Corporate Client Banking
Commercial Term Lending
Real Estate Banking
6885
(97%)
6882
(97%)
7092
(100%)
Asset Management:
Global Investment Management
Global Wealth Management
12119
(106%)
12028
(105%)
11405
(100%)

The above table summarizes the key
business drivers and areas where the customer
base and/or customer activity is moving in the
positive direction for JPMorgan Chase & Co.
JPMorgan’s number of active online
consumer banking customers has increased by
8% each year for the past two years.
The number of active mobile customers has
increased by 45% since 2013 (20% last year
alone)
The two metrics stated above emphasize
the growing customer base and potential
consumer preference for online, mobile and
electronic consumer banking services. This
coincides with the decrease in the number of
branches ATM’s.
Geographic Analysis
JP Morgan currently operates in around 100 countries
around the globe which is greater than its closest
competitors Citigroup (~95) Bank of America Corp (>35)
and Wells Fargo (~30).
It generates a huge network effect as it serves both local
institutions in their particular country and the same
institutions and corporations elsewhere. In addition to
this JP Morgan often serves any multinationals when
they then enter these international countries.
With head offices in 23/50 states in the US, 6 European
countries, 5 Latin American Countries, 2 Asian countries
and The United Arab Emirates, JPMorgan Chase can be
argued to have a strong physical global presence
While the majority of JPMorgan Chase’s revenue still
comes from the US (around ¾) Almost a quarter of JP
Morgan and Chase’s Revenue comes from outside of the
US this proportion has stayed fairly constant since 2013
fluctuating between 23.8-25.4% emphasizing the
stability of JPMorgan’s business outside of the US.
Citigroup receives around 50% of its revenue from
outside of the US, however, JPMorgan & Chase still
generates a greater total of revenue than Citigroup
within Europe / Middle East /Africa - 45% higher than
Citigroup in 2015.
JPMorgan and Chase’s closest rival Bank of America
Group only receives around 13% of its revenue from
outside the US, thus it can be argued that JP Morgan is
better poised to withstand any local stress within the US
and take advantage of emerging markets.
Another one of JPMorgan’s rivals Wells Fargo poorly
reports its revenue generated from overseas; it is
estimated that only 2% of its revenue comes from international business thus JPMorgan Chase is better poised
to take advantage of emerging markets.
Geographical Revenue data for JPMorgan
Chase and competitors (in millions $):
2013 2014 2015
JPMorgan Chase
Europe/ Middle East and Africa 15585 16013 14206
Asia and Pacific 6168 6083 6151
Latin America and the Caribbean 2251 2047 1923
North America 73363 70969 71263
Total 97367 95112 93543
Goldman Sachs
Americas 19858 20062 19202
Total 34206 34528 33820
Morgan Stanley
Americas 23358 25140 25080
Total 32493 34275 35155
Citigroup
North America 31232 32609 32553
Total 76724 77219 76354
Wells Fargo
Non-Us Unable to find Data, estimated 2%
of revenue from International
Business
North America
Total 83,780 84,347 86,057
Deutsche Bank
Americas 7477 8108 8227
Total 31915 31949 33525
Bank Of America Corp
North America 76612 72960 71659
Total 88942 84247 82507
Table formulated from annual reports and investor relations of all banks
and http://blogs.wsj.com/moneybeat/2015/04/13/a-look-at-wells-
fargos-overseas-expansion/

Demographic Analysis
Business Segment Revenue Data for JPMorgan
Chase and competitors (in millions $)
(consolidated totals)
Company 2015 2014 2013
JPMorgan Chase
Consumer & Community
Banking
43820 44368 46537
Corporate and Investment Bank 33542 34595 34712
Commercial Banking 6885 6882 7092
Asset Management 12119 12028 11405
Corporate 267 12 22
Total 93543 95112 97367
Goldman Sachs
Investment banking 7027 6464 6004
Investment management 5868 5748 5194
Commissions and fees 3320 3316 3255
Market Making 9523 8365 9368
Other Principal transactions 5018 6588 6993
Total 33820 34528 34206
Morgan Stanley
Institutional Securities 17953 16,871 15,519
Wealth Management 15,100 14,888 14,143
Investment Management 2,315 2,712 3,059
Intersegment Eliminations 213 196 228
Total 35155 34275 32493
Citigroup
Global Consumer banking 33862 36017 36305
Institutional Clients Group –
Investment banking // Markets
and securities services
33748 33052 33322
Corporate / Other 907 301 322
CitiHoldings – Consumer Loans,
Consumer portfolios,
institutional businesses,
portfolios of assets.
7837 7849 6775
Total 76354 77219 76724
Wells Fargo
Community Banking 49341 48158 47679
Wholesale Banking 25904 25398 25847
Wealth and investment 15777 15269 14330
Other 4965 4478 4076
Total 86,057 84,347 83,780
Deutsche Bank
Corporate Banking and
Securities
14219 13629 13400
Private and Business Clients 8911 9565 9395
Global Transaction Banking 4616 4119 4025
Deutsche Asset and Wealth
Management
5408 4704 4718
Non-Core Operations Unit 401 172 896
Total 33525 31949 31915
Bank Of America Corp
Consumer Banking 30618 30809 31932
Global Wealth and Investment
Management
18001 18404 17790
Global Banking 16919 17607 17436
Global Markets 15067 16188 15458
Legacy Assets & Servicing 3430 2676 4424
All Other 619 568 2761
Total 82507 84247 88942
Table formulated from annual reports and investor relations of all banks

Overall Investment Banking Fees:
JPMorgan Chase is ranked number 1 for Global Investment Banking Fees and has been ranked #1
consistently, followed by Goldman Sachs (#2), Bank of America Merrill Lynch (#3), Morgan Stanley (#4)
and Citi (#5).
Investment Banking fees have fallen across the board in comparison to last year over the first 3 quarters,
however, JPMorgan has seen the lowest drop in fees in comparison to the other Top 10 investment banks;
thus implying that JPMorgan’s competitors are more affected by the decreasing money spent on Investment
Banking than JPMorgan.
Mergers and Acquisitions:
While Goldman Sachs leads the Top banks in Fees for Mergers and Acquisitions it has seen a 15% decrease
in comparison to last year in the first three quarters whereas JPMorgan & Chase has seen a 12% increase in
the same time period thus showing positive signs for JPMorgan’s future market share in Mergers and
Acquisitions. JPMorgan’s next closest competitors Morgan Stanley and Bank of America also saw decreases
of 7% and 25% respectively.
Equity:
JPMorgan leads in Equity Fees, followed by Morgan Stanley and Goldman Sachs which are both above
$120+ million dollars behind and have seen greater decreases in fees at 36% and 44% respectively
whereas JPMorgan and Chase has seen a smaller decrease at 23% in fees, again emphasizing JPMorgan’s
resilience and ability to cope with declines in Investment Banking fees.
Bonds:
JPMorgan currently leads in Bonds Fees followed by Bank of America and Citi, and, although it has seen a
decrease in fees in comparison to the same period last year its closest competitor Bank of America has also
seen a small decrease.
Loans:
JPMorgan is safely second in Loan Fees from the first 3 quarters of 2016 leading Citi by $114.93 Million.
Consumer Banking:
JPMorgan and Chase generates more revenue than two of its closest competitors through consumer
banking; 43% more than Bank of America Corp and 29% more than Citigroup. Although its revenue from
this segment has decreased by 1% over the past year Citigroup’s revenue from this segment has also
decreased by 6% in addition to Bank of America Corporation by 1% of the same time period. Wells Fargo’s
revenue from consumer banking may have increased by 2% over the same time period and generated 13%
more than JPMorgan & Chase, However, the recent Scandal in which Wells Fargo employees created 2
million accounts for customers without their permission could work in the favour of JPMorgan & Chase.
In Wells Fargo’s 3rd Quarter Earnings report it was revealed that applications for new checking accounts
dropped by 25% since last September. Research conducted by Cg42 since the scandal found that of the
Wells Fargo customers they surveyed, 14% had made the decision to switch banks and 30% were actively
exploring alternatives. They also suggested that JPMorgan and chase would profit from the scandal as their
national presence make them a viable alternative with a projected 0.7 billion increase in revenue as a
result. Wells Fargo’s revenue is projected to decrease by $4 billion in total over the next 12-18 months with
a total of $8 billion at risk.

Market Specific Conditions
Strengths Weaknesses
Brexit
Short term increases in trading revenue post Brexit result
with 10x normal Trading levels and hence 10x commissions.
Potential for other days of increased trade volume with
announcements on advancements in the Brexit situation.
Asian Investment Banking
Asia Investment Bank fees up 15% in 2016 compared to a
20% drop in the US despite Low Deal Fee Culture.
M&A boom in China.
AT & T acquisition of Time Warner
AT&T has agreed to acquire Time Warner, the owner of
HBO, CNN and Warner Brothers for $85.4bn. The deal will
reshape the global media and telecoms landscape
JP Morgan and BML are working on the financing of the
transaction.
Low Deal Fee Culture in Asia
Difficulty making money in Asia due to Low Deal Fee
Culture
Opportunities Threats
Wealth Creation in Emerging Markets especially Asia
There is an opportunity for global wealth and investment
management within Asia.
Asia’s wealth is growing 4.2% more quickly in comparison
to the global average of 7.2%.
Asia is home to 4.7 million of the world rich people, holding
$15.8 trillion.
It is estimated that a fair proportion of Asia’s wealth is not
being professionally managed Gap in the market?
FinTech
Advances in Trading Algorithms and Electronic Trading.
Goldman Sachs pushing a computer programme which
allows investors to trade in the US corporate bond market.
Brexit
Operations shift to cheaper locations outside of the UK,
with overseas banks befitting from lower costs outside of
London.
Brexit
Necessity to relocate as Britain may potentially no longer
be the ‘passport’ to sell financial products and services
within the EU that it previously was.
Uncertainty and cost of reallocation may affect operations
of US banks who have a base in the UK.
Regulation approvals and permissions are needed to
relocate within Europe, these could take 2-3 months to put
together and a further 6 months in order to receive
approval for an investment bank or brokerage or 9 months
for a retail bank (in normal times).
The slow process of relocation due increased regulator
workload and therefore longer time to receive approvals
and permissions is a threat.
Cyber-Risk
Ability to prevent and recover for attacks
Cyber Insurance for attacks?

Key Financial Analysis
Accounting Ratios
2010 2011 2012 2013 2014 2015 2016 Q3 ( latest Qtr)/ EPS predicted
1.81 1.46 1.41 1.48 1.45 1.4 1.39 MS
3.96 4.48 5.2 4.34 5.29 6 5.83 B
10.17 10.55 10.98 8.63 9.82 10.2 9.87 MS
74.48 64.17 61.48 57.34 55.55 65.43 N/A B
12.1 12.3 12.6 11.9 11.6 13.5 13.9 B
12.58 12.89 12.1 12.08 12.14 10.62 10.89 MS
59.36 64.35 66.2 72.42 63.76 62.35 N/A B
0.76 0.8 0.86 0.7 0.81 0.91 0.89 MS
8.23 6.42 7.51 9.3 10.97 11.94 12.86 B
2010 2011 2012 2013 2014 2015 2016 Q3 ( latest Qtr)
2.48 3.13 2.87 2.61 2.59 2.65 2.78 MS
13.18 4.51 14.13 15.46 17.07 12.14 15.46 B
11.5 3.65 20.66 10.98 11.15 7.47 6.24 MS
34.6 30.93 35.23 41.73 42.64 38.91 N/A B
16 13.8 16.7 16.7 13.8 13.5 13.6 B
12.95 13.72 13.5 12.79 11.63 11.4 11.91 MS
65.04 76.59 64.93 63.17 61.42 71.91 N/A B
0.88 0.27 0.78 0.84 0.91 0.65 0.54 MS
11.52 14.03 8.25 10.2 10.75 10.26 11.2 B
2010 2011 2012 2013 2014 2015 2016 Q3 ( latest Qtr)
2.34 1.82 1.28 1.11 1.11 0.98 0.98 MS
3.54 3.63 2.44 4.35 2.2 5.4 4.7 B
6.71 6.48 4.13 7.02 3.37 8.02 6.68 MS
80.48 77.95 72.85 71.38 74.84 71.08 N/A B
12.91 13.55 14.06 13.6 11.45 13.49 14.2 B
11.73 10.56 10 9.52 9.21 8.44 8.55 MS
55.82 66.25 73.58 64.43 72.33 58.08 N/A B
0.56 0.58 0.4 0.72 0.36 0.91 0.77 MS
12.6 6.75 8.59 11.79 11.41 8.92 9.76 B
2010 2011 2012 2013 2014 2015 2016 Q3 ( latest Qtr)
2.12 1.76 1.26 1.14 1.08 1.01 0.95 MS
-0.37 0.01 0.25 0.9 0.36 1.31 1.46 B
-1.77 0.04 1.28 4.61 1.71 6.29 5.51 MS
96.54 90.99 83.89 83.95 79.92 76.04 N/A B
11.24 12.4 12.89 12.44 13.1 11.3 12.4 B
10.7 10.06 10.13 9.58 9.39 9.17 9.04 MS
74.61 85.01 85.59 77.07 88.25 68.56 N/A B
-0.16 0.13 0.47 0.18 0.68 0.6 MS
10.67 19.93 9.28 11.6 12.95 11.61 12.14 B
2010 2011 2012 2013 2014 2015 2016 Q3 ( latest Qtr)
4.26 3.39 3.06 2.68 2.54 2.41 2.35 MS
2.63 1.23 -0.02 1.36 1.6 2.9 2.67 B
8.49 3.82 -0.05 4.31 4.94 8.56 6.09 MS
23.71 21.45 26.01 37.15 36.77 38.34 N/A B
16.1 16.6 17.7 15.7 14.1 17.4 18.9 B
16.96 12.39 12.89 13.28 12.35 11.64 11.91 MS
79.2 80.07 97.88 85.19 88.94 74.46 N/A B
0.46 0.27 0.33 0.39 0.71 0.5 MS
11.52 9.93 15.4 25.04 12.17 13.27 B
2010 2011 2012 2013 2014 2015 2016 Q3 ( latest Qtr)
1.21 1.02 0.29 0.16 0.64 0.12 0.11 MS
0.72 0.91 0.74 0.84 0.69 0.64 0.58 B
9.54 10.96 8.4 9.08 7.35 6.64 5.14 MS
79.7 76.4 75.65 73.88 73.08 72.43 N/A B
12.1 11.5 13.4 12 12.5 13.9 14.1 B
16.62 16.1 15.36 14.69 13.83 12.78 13.64 MS
55.22 57.48 62.82 59.64 67.35 66.5 N/A B
0.55 0.67 0.53 0.6 0.52 0.5 0.38 MS
13.91 8.28 14.2 13.06 13.74 12.15 15.5 B
2010 2011 2012 2013 2014 2015 2016 Q3 ( latest Qtr)
0.56 2.78 2.68 1.57 0.36 0.36 0.36 MS
0.26 0.22 -0.05 0.04 -0.01 -0.02 0.11 B
7.26 5.65 -1.91 0.99 -0.21 -0.54 -1.31 MS
127.34 120.9 112.49 102.2 101.29 96.63 N/A B
13.5 12.9 13.2 11.3 13 14.7 14.6 B
29.29 28.13 27.81 23.69 22.8 18.73 21.5 MS
63.73 70.25 84.02 78.65 80.79 81.23 N/A B
0.25 0.2 -0.07 0.04 -0.01 -0.03 -0.06 MS
8.72 7.22 71.57 BP/E
Efficiency ratio
Return on Assets
P/E
Debt/equity
Working capital
Quick ratio
Earnings per share ( EPS) GAAP actual
Capital Ratios ( tier 1)
Leverage ratio
Return on Assets
P/E
Goldman Sachs
Return on Equity
Return on Equity
Loan Deposit ratio
Leverage ratio
JP Morgan
%
Debt/equity
Working capital
Quick ratio
Loan Deposit ratio
Leverage ratio
Efficiency ratio
Return on Assets
P/E
Citi Bank
Debt/equity
Working capital
Quick ratio
Working capital
Quick ratio
Return on Equity
Loan Deposit ratio
Loan Deposit ratio
Leverage ratio
Efficiency ratio
Return on Assets
P/E
Debt/equity
HSBC
Working capital
Quick ratio
Return on Equity
Leverage ratio
Efficiency ratio
Return on Assets
P/E
Debt/equity
Morgan Stanley
Quick ratio
Return on Equity
Loan Deposit ratio
Bank of America
Debt/equity
Working capital
Return on Equity
Loan Deposit ratio
Leverage ratio
Efficiency ratio
Return on Assets
Working capital
Quick ratio
Return on Equity
Loan Deposit ratio
Leverage ratio
Efficiency ratio
Efficiency ratio
Return on Assets
P/E
Barclays
Debt/equity

The return on equity as shown above shows that JP Morgan has the highest ROE for Q3 2016 at 9.87%. This
means that it is being more efficient in comparison to its rivals since it is making more profit than the other
firms whilst having either the same or lower equity. Therefore JP Morgan is currently the most efficient with its
money and how it generates profits. This therefore is an advantage and therefore is a bullish point.
The above graphs shows that clearly Goldman Sachs has the highest profitability per share, offering at one-
point, earnings per share of 17.07%, a huge dividend payment for shareholders. JP Morgan stands way below
that at currently 6%, its highest EPS in the last 5 years. Therefore this shows maybe JP Morgan is currently
underperforming in comparison to Goldman Sachs, or JP Morgan are retaining most of their profit rather than
giving it out through dividends.

In terms of leverage ratios, JP Morgan is on par with most banks, apart from Barclays who currently have the
highest leverage ratio of 21.5%. JP Morgan has a leverage ratio of 10.89% in 2016 Q3.
Return on Assets means how much income can be generated from the assets used. As shown in the above
graph, JP Morgan uses its assets more efficiently than the other firms since it has the highest return on assets
for 2016 Q3 of 89%. JP Morgan had a slight dip in 2016 Q3 from 91% to 89%, a small figure compared to other
firms such as Morgan Stanley and Citi Group who combined had a drop of 35% in ROA. So this goes to show
that the assets JP Morgan have are quality assets and furthermore JP Morgan know how to use them to
generate earnings.

The loan to deposit ratio shows total amount of loans divided by total amount of deposits. Banks such as JP
Morgan and investors use this to see if they are liquid enough to pay off unforeseen debts. Since banks loan
money to make money, they may be short of money if an unforeseen debt is incurred. Therefore if their L/D
ratio is high, it means that they have loaned a lot of money and it makes them susceptible to bankruptcy, giving
higher risk. JP Morgan in 2015 has an L/D of 65.43%, showing that they have loaned money to gain profit, but
then also have deposits of 34.57%. This shows that they are clearly going for slightly higher risk to make
money, but also have enough deposits to likely be able to pay off unforeseen debts.
Tier 1 Capital ratio is also another ratio that must be considered in order to see if JP Morgan has an advantage
over the other firms listed. Having a higher capital ratio means more capital is available in comparison to risk-
weighted assets. A % over 6% means a company is well capitalized and therefore has a lower risk of going
bankrupt. As shown above JP Morgan have a capital ratio of 13.9%, this is a very good figure and is twice the
capital needed to be well capitalized. However, it has not got the most capital like Morgan Stanley, but clearly JP
Morgan are making higher profits due to their higher risk, therefore this could be seen as both bullish and
bearish. Since they may not have a huge amount of capital compared to Morgan Stanley however they may be
giving out loans and taking risks to make money.
Price earnings ratio is also a very important ratio to include since it incorporates both the price of the share and
the earnings per share. Dividing Price per share by earnings per share will give a figure that will help investors
make decisions in which stock they buy. For example one stock may be $10 and have an EPS of $1, and another
stock may also be $10 but have earnings of $2. The shares are the same price but one earns more. The P/E of
share 1 is 10 and share 2 is 5. Therefore share 2 is better since more money can be gained. The graph shows

above that the best P/E is HSBC, since more money can be gained per share in comparison to JP Morgan and the
rest of the firms. Therefore a better buy could be HSBC in the long term since it has a better P/E.
Debt equity ratio is the amount of debt to equity a company will have. For example a company may have $20
million debts and $10 million equity, therefore there debt equity is 2. Anything above 2 is considered a risky
investment since debt is at least double the company’s equity. The above graph shows that JP Morgan’s debt
equity is currently at 1.39 in 2016 Q3. This shows they are not so risky as a business like Goldman Sachs, who
currently has debt equity of 2.78. This therefore makes JP Morgan more investable since they have a lower
probability of bankruptcy.
Price earnings ratio is also a very important ratio to include since it incorporates both the price of the share and the
earnings per share. Dividing Price per share by earnings per share will give a figure that will help investors make
decisions in which stock they buy. For example one stock may be $10 and have an EPS of $1, and another stock may
also be $10 but have an earning of $2. The shares are the same price but one earns more. The P/E of share 1 is 10
and share 2 is 5. Therefore share 2 is better since more money can be gained. The graph shows above that the best
P/E is HSBC, since more money can be gained per share in comparison to JP Morgan and the rest of the firms.
Therefore a better buy could be HSBC in the long term since it has a better P/E.
0
5
10
15
20
25
30
P/E
JPM
GS
CITI
BAC
MS
HSBC
BARC
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Debt/Equity
JPM
GS
CITI
BAC
MS
HSBC
BARC

Debt equity ratio is the amount of debt to equity a company will have. For example a company may have $20 million
debts and $10 million equity, therefore there debt equity is 2. Anything above 2 is considered a risky investment
since debt is at least double the company’s equity. The above graph shows that JP Morgan’s debt equity is currently
at 1.39 in 2016 Q3. This shows they are not so risky as a business like Goldman Sachs, who currently has debt equity
of 2.78. This therefore makes JP Morgan more investable since they have a lower probability of bankruptcy.
CCA
Comparable company analysis (CCA) is a method used to assess the value of a company using the metrics of other
businesses of similar size in the same industry. Comparable company analysis assumes that similar companies will
have similar valuation multiples, such as EV/Revenues. In this CCA model we will calculate JP Morgan Chase & Co.
(USA) multiples and compare them with relevant peers.
First of all, for the “comparable company analysis 2016” has been established a peer group with possible
competitors of similar financial firms of similar size in the banking sector and mainly USA region. The aim of CCA is to
help the investors to be able to compare JP Morgan Chase & Co. to its competitors such as HSBC plc., Barclays plc.,
Bank of America Corp, Morgan Stanley, Citigroup and Goldman Sachs group on a relative basis.
By using P/E ratio, EV/Revenues ratio and Price/book ratio we can determine JP Morgan Chase & Co’s relative
performance compared to its peers. In stock trading, one of the most widely used multiples is the price-earnings
ratio (P/E ratio) which is popular in part due to its wide availability and to the importance ascribed to earnings per
share as a value driver.
In essence, the price-earnings ratio of JP Morgan Chase Co which is 10,57x indicates that the investor can expect to
invest 10,57$ in JP Morgan Chase & Co. in order to receive one dollar of that company’s earnings. P/E ratio is
sometimes referred to as the multiple because it shows that investors are willing to pay 10, 57$ per dollar of current
earnings. Thus, JPM has the 6th
lowest P/E ratio compared to its peers with the average P/E ratio is equal to 12,01x.
Actually, as the P/E ratio of JP Morgan is lower than the P/E mean of its competitors. In this case a low P/E can
indicate either that a company may currently be undervalued or that the company is doing exceptionally well
relative to its past trends. However, the highest P/E in CCA 2016 belongs to HSBC plc. and is equal to 14,14x suggests
that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. In CCA
2016 Barclays plc. has been excluded shown as N/A, due to the net clean income (Q3 2016 - billion in $) is negative.
Finally, the implied share price using relative P/E analysis is from a minimum of $61, 96 to a maximum of 89, 41.
Currently JPM is trading at 68, 49 at a lower end of the scale. If ever falls below $62 then it would be definitely a buy
because the JPM’s share would be undervalued. However, the usefulness of P/E ratios is lessened by the fact that
earnings per share is subject to distortions from differences in accounting rules and capital structures between
companies.
EV/R is one of numerous fundamental indicators that investors use to determine whether a stock is priced well. It
tells us how much bigger the EV is than revenue. In JP Morgan Chase & Co.’s peer group including itself all banks
present negative EV/R ratio except from Bank of America which has a positive one (EV/R is equal to 2,07x) and this
means that EV is more than 2 times bigger that its revenues. Obviously higher the ratio the more expensive the
company is and investor needs to spend more money in order to buy Bank of America’s stock. In all other peers
groups, mainly JPM has a higher EV/R ratio (-1,93x) than the mean value of EV/R ratio (-3,46) but still JPM’s EV/R
ratio remains negative which probably can be explained due to its very high amount of cash so as it has negative
Enterprise Value. Thus, JPM’ share price can be potentially undervalued. As a final point, EV/Revenue ratio the closer
to zero in this case JPM has a negative EV/R ratio and assume that it is unlikely JPM faces intense competition as it is
one of the biggest banks in USA banking sector.
So, JPM has more equity compared with its peer competitors. This can be confirmed by its market cap, which is the
biggest in our peer analysis (market cap is equal to $247,38 billion). Thus, investors are much more confident and
have a stronger sentiment that JPM will be a more secure investment option for the long-run. Moreover, Bank of
America has a positive EV/R, this can be explained as BAC has not much cash or less equity relative to its
competitors. The market actually shows that BAC is overvalued relative to its competitors.
The price-to-book ratio (P/B Ratio) is a ratio used to compare a stock's market value to its book value. The P/B ratio
reflects the value that market participants attach to a company's equity relative to its book value of equity. A stock's

market value is a forward-looking metric that reflects a company's future cash flows. The book value of equity is an
accounting measure that is based on the historic cost principle, and reflects past issuances of equity, augmented by
any profits or losses, and reduced by dividends and share buybacks. So, in this case JP Morgan has P/B ratio 1,09x
but technically is 1 indicating a potentially undervalued stock or fair priced. However, because JPM’ P/B ration is
above mean (0,75x) probably its peer group has more undervalued stock. However, JP Morgan’ s P/B ratio should
not be used as a single evaluation of a stock because, while a low P/B can indeed reveal an undervalued stock, it can
also indicate a company with serious underlying problems. A weakness in a P/B evaluation is that it fails to factor in
things such as future earnings prospects or intangible assets.
To sum up, it is necessary to take seriously into account the possible advantage and limitations of the ratios of CCA
2016. Multiples have some advantages such as multiples are robust tools that can provide useful information about
relative value. Moreover, their very simplicity and ease of calculation makes multiples an appealing and user-friendly
method of assessing value. However, it is vital to consider carefully CCA 2016’s possible limitations and assumptions
such as a multiple represents a snapshot of where a firm is at a point in time, but fails to capture the dynamic
environment of banking sector. In addition, multiples are primarily used to make comparisons of relative value but it
is important to understand that each financial firm can use different accounting policies, which can result in
diverging multiples. Finally, multiples are based on historic data or near-term forecasts. This, valuations based on
multiples will therefore fail to capture differences in projected performance over the longer term.
To sum up, relative valuation models provide a ballpark measure of valuation that can be used to help analysts
gauge the true value of a company. To conclude, according to the fundamental analysis, P/E and EV/R ratios shows a
bullish argument which supports the view that JP Morgan Chase&Co.’s stock price is potentially undervalued while
P/B ratio analysis indicates a bearish argument that the JPM’s stock price is maybe undervalued or fair priced
relative to its peers. Finally, P/B ratio analysis shows a positive sign because it shows confidence at the market for
JPM and this scenario reinforces by the high financial performance of JPM such as high earnings and growth rate in
revenues. Consequently, market believes that JPM Morgan is fairly priced compared with its peers but this also
shows that investors will pay higher price under the expectation that in the long term will get higher cash flow
returns as a more secure investment option.

JPMorgan Strategy Analysis
Business Strategy
Chief executive James Dimon and his top lieutenants have put together several strategies. Ideas and actions range
from new spending on FinTech to cutting costs on technology that keeps the bank running. Reducing fix and
operating costs will reducing the running costs of the business therefore increasing the company’s profits putting JP
Morgan in a comfortable place against its top competitors.
Specifically JP Morgan plans to increase its technology spending to $9.4bn from $9.2bn, which is an increase of
200million USD. “While working to allocate about 40% of that budget to new investments and technologies, up from
30% currently” said Matt Zames, the bank’s chief operating officer.
Theses are some of the ways that the bank will start slimming its spending:
1. Location strategy- The bulk of its technology employees are now centered in 13 hubs across the world, from
Bournemouth, England, to Delaware to Tampa, Fla. The bank introduced hub scorecards in early 2015 to measure
how those sites are performing on matters including recruiting, training, retention and diversity
2. Reducing legacy applications: Known internally as “kill the tail,” the bank has cut the number of applications it
uses by 13% in 2015, with a goal to cut about 25% of its apps, Mr Zames said.
3. Consistency: The bank is driving toward more consistency across its technology. Tech production issues have
dropped by about 65% in 2015 from 2013.
Some ways of spending on new technology:
1. Digital: Heavy investments here, from the Chase mobile app to ATMs that do 60% of the functions for the
company, with the goal of 90% by the end of 2017. For JP Morgan digital investment is one of the key factors for its
success.
2. Analytics: They want to better target and connect potential customers across the bank, from its Chase retail
platform to the investment bank. For instance, it is using a sales prospecting tool with its equity capital markets and
commercial banking clients to identify future clients through machine learning algorithms examining public data for
companies. It is rolling this out with the debt capital markets team this year. Chief administrative officer at J.P.
Morgan’s corporate and investment bank said this. In the commercial bank, the engine will identify more than
10,000 new prospects. It was rolled out in 15 markets in 2015.
JPM’s business principles
Certain principles are so fundamental to the success of JP Morgan and the types of different strategies that helps the
business be the best. The details will be explained below. If they can adhere to these principles they will reach their
goal of becoming the best financial services company in the world.
Aspire to be the best
They develop a world-class franchise in every business they operate in
Client-driven, so they can get exactly what they want quickly and effectively. Also consistently delivering the best
products and services in the most cost-effective way possible.
Innovate, test and learn
Create powerful brands that carry a commitment of quality and integrity
Execute flawlessly
Demand and maintain strong financial discipline
Create and maintain a strong balance sheet
Design and maintain the best systems and operations

Eliminate waste and bureaucracy
Maintain a strong system of internal governance and controls
Measure performance through a complete and balanced scorecard
Build a great and winning culture
Operate with the highest standards of integrity
Train and retain great managers
Be open and honest with everyone e.g. colleagues, shareholders and communities
Get incentives right
Foster an environment of respect and inclusiveness
Give back to our communities
Net revenue on a reported basis totaled $24.7 billion, $24.4 billion, and $22.8 billion for the third quarter of
2016, second quarter of 2016, and third quarter of 2015, respectively.
Net income was $6.3 billion, a decrease of 8%.
Net revenue was $25.5 billion, up 8%.
Net interest income was $11.9 billion, up 6% (primarily driven by loan growth and the net impact of higher
rate)
Net income was $2.2 billion, a decrease of 16%.
Net revenue was $11.3 billion, up 4% over the prior year.
Consumer & Business banking net revenue was $4.7 billion, up 4%, reflecting strong deposit growth, partially
offset by spread compression.
Mortgage banking net revenue was $1.9 billion, up 21%, driven by higher MSR risk management results, higher
JPMorgan Chase & Co. News Release 3 production margins, and portfolio growth.

Net income was $2.9 billion, up $1.4 billion, reflecting higher net revenue and lower legal expense.
Banking revenue was $2.9 billion, up 6%, driven by higher Investment Banking revenue, up 14%, reflecting higher
debt and equity underwriting fees as well as higher advisory fees.
The business continued to rank #1 in Global Investment Banking fees.
Treasury Services revenue was $917 million, up 2%.
Lending revenue was $283 million, down 15%.
Markets & Investor Services revenue was $6.5 billion, up 21%, driven by higher
Markets revenue, up 33%.
Fixed Income Markets revenue was up 48% reflecting broad based strength across products.
Expansion in the Asian region
There has been talk for a while now of a major expansion of JP Morgan into the Asian sector. This sector has been
booming recently with china’s economy having GDP growth of over 13%. India, japan and Russia are now also on the
rise. Moving into emerging markets and getting in early will be hugely beneficial for JP Morgan. Establishing a base
and getting consumer satisfaction and getting them to know the business so that consumers will be loyal and remain
customers of JP Morgan, brand image. Forecasts have shown that expanding into Asia could increase revenue by at
least 25%, within just a few years of being established.
However, Asia’s diverse nature presents both types of organizations with a range of challenges in terms of
structuring and optimizing their financial processes and business models. Many corporations and financial
institutions have spent much of the  past three years dealing with a challenging global business environment. In the
case of many developed economies, these uncertainties appear to be with us for some time to come, which is
prompting many to look to emerging markets in Asia for their future growth prospects and profitability. For
instance, a recent McKinsey survey revealed that 37% of executives expected more than a quarter of their profits or
revenues to come from emerging markets over the next five years. On the corporate side, U.S. and European
multinationals facing limited growth in their existing markets, as well as Asian multinationals wishing to break out of
saturated home markets or accelerate their growth internationally, are looking for new opportunities in Asia. In the
case of financial institutions, regional banks from developed economies, as well as indigenous Asian banks, are
looking to support their corporate clients’ expansion across Asia.
Growth Strategy
JP Morgan presents strong performance in each of its businesses despite the continuation of reasonably challenging
conditions. Firstly, according to the financial results firm reported net income of $6.3 billion in 3Q for 2016 with
earning per share ratio $1.58 and also return on tangible common equity of 13% on $25.5 billion of revenue. JP
Morgan reported markets revenue increased by 33% for third quarter in the CIB. More specifically, revenue of $25.5
billion was up $2 billion year-on-year or up 8% and non-interest revenue was up $1.3 billion driven by strong
performance in the Commercial International Bank. Moreover, consumer deposit growth up 11% and net reserve
release in wholesale for oil and gas of about $50 million. In addition, core loans, net interest income was up $700
million and is trending for the full year to be above the $2.5 billion guided last quarter. Finally, adjusted expense of
$14.5 billion was up $500 million both year-on-year and quarter-on-quarter due to notable expense items in consumer
and increase in Federal Deposit Insurance Corporation surcharge and higher marketing expenses. So, net income was
$6.3 billion and while down 8% year-on-year but benefits from most notably significant tax benefit. Thus, if you
adjust for tax, legal expenses and credit reserves, net income is up over $800 million year-on-year.

3Q16 financial results
In addition, capital and leverage ratios were broadly flat quarter-on-quarter with the CET1 ratio of 11.9%, as net
capital generation was offset by strong loan and commitment growth. In terms of total assets (EOP) closes $2.5
trillion due to principally a result of strong deposit growth. JP Morgan returned $3.8 billion of net capital to
shareholders including $2.1 billion of net repurchases and common dividends of $0.48 a share.

Consumer and Community banking
Consumer and community banking generated $2.2 billion of net income and ROE of 16% ((Return on equity
(ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its
management team) is managing the equity that shareholders have contributed to the company.)) Net
income ÷ shareholders’ equity
Record deposit growth more than twice the industry average, up 11% year-on-year.
Core loan growth remained strong at 19%. And while it’s primarily driven by mortgage, we also saw 14%
growth in auto, 9% in business banking and 7% in card loans.
Revenue of $11.3 billion was up 4% year-on-year.
Consumer and business banking revenue was also up 4% on the back of strong deposit growth.
Mortgage revenue was up 21% on higher MSR
Finally, the credit environment remains favourable. In cards, we built $200 million of reserve this quarter,
reflecting growth in the portfolio including newer vintages which have a higher loss rate than the portfolio
average, And in auto, we built $25 million of reserves on the back of high quality loan growth
Corporate and investment bank

CIB of $9.5 billion, up 16% year-on-year was the best reported performance for a third quarter and included the
highest IB fees on record for third quarter too, up 15% with strong market performance across the board, revenues
up 33%.
Expense was down 20% year-on-year on lower legal costs
Business delivered a pretty clean $2.9 billion of net income and a 17% ROE this quarter.
We ranked number one in wallet globally and in North America and EMEA and we also ranked number one on a
number of deals basis for overall ECM and IPOs.
Markets revenue of $5.7 billion was up 33% year-on-year.
Fixed income revenue was up 48% compared to a weaker third quarter last year.
Rates was a standout in terms of performance this quarter as markets stayed active post Brexit with good client
flow, as well as anticipation of an uncertainty around central bank actions.
credit and securitized products came back from a weak prior period with a recovery in the energy sector and
central bank actions motivating clients to put money to work
Commercial banking
Net income of $778 million on revenue of $1.9 billion and an ROE of 18%.
Revenue was up 14% year-on-year, driven by a trifecta of NII on loan growth, higher deposit spreads, as well as
higher IB revenues.
We’ve added over a 100 net new bankers, opened seven new offices and further built out our specialized industry
coverage. And we’ve added nearly 600 new relationships in middle market this year.
CRE loans grew 19%, reflecting strong originations in both commercial term lending and real estate banking.
Asset management

Asset management reported net income of $557 million with a 29% pre-tax margin and an ROE of 24%.
JPM Stock Vs S&P 500 Index
To begin with, JP Morgan Chase stock performance: The JP Morgan Chase stock charts shows stock trend against the
S&P 500 index. JP Morgan Chase stock price has gone up by 8.39% in the last 1 year versus the S&P 500 index
which has returned 4.32%.The price earnings ratio is a valuation ratio which indicates how much an investor is willing
to pay for every dollar of earnings. JPM P/E ratio is 9.9 as of Oct 21, 2016. A high growth company usually has a high
PE ratio as investors are expecting high earnings growth in the future. The PE ratio is calculated as the market value
per share (or stock price) divided by the earnings per share.
So in this case, If a company were currently trading at a multiple (P/E) of 9.9, the interpretation is that an investor is
willing to pay $9.9 for $1 of current earnings. In general, a high P/E suggests that investors are expecting higher
earnings growth in the future compared to companies with a lower P/E. A low P/E can indicate either that a company
may currently be undervalued or that the company is doing exceptionally well relative to its past trends.) Basically,
JPM has the 5th lower P/E ratio compared with other competitive banks after they are following Morgan Stanley and
Citibank.
JP Morgan Chase Revenue Chart

Topline or revenue is the income that a company generates by sales of its products or services for a given period.
Investors look for stocks whose revenue is growing Quarter on Quarter (or QOQ) or Year over Year (or YOY) as it
indicates that the company is growing. JPM saw an increase of revenue by 1.1% from 2016-Q2 to 2016-Q3.
JP Morgan Chase Earning Chart- for 3 years
JP Morgan Chase earnings per share: A company’s earnings per share or EPS is the portion of its net income or profits
allocated to each outstanding share of its common stock. Our chart on earnings per share shows the Eps for the last
three years, and is a useful measure of profitability, and should be used while doing JP Morgan Chase stock analysis.
JP Morgan Chase's EPS registered 1.58M of common stock in the latest quarter of 2016-Q3.
JP Morgan Chase Net Income Chart-for 3 years
JP Morgan Chase Net Income: A company’s net income or bottom line is the firm’s total income after subtracting the
cost involved in creating the product or service (COGS), expenses, and taxes for a given accounting period. It is also
called as net profit and is a line item in the income statement of a company’s financials. JPM saw an increase of net
income by 1.39% from 2016-Q2 to 2016-Q3.
Growth strategy with looking at M&A
Five years of consistent growth and steady recovery in the U.S. is supplying buyers with the confidence to seek out
acquisitions as they face sluggish organic revenue growth and limited operating margin improvements. Furthermore,

in the fourth quarter of 2015, businesses were sitting on more than $6 trillion in accumulated cash reserves globally.
Healthcare and Telecommunications, Media & Technology (TMT) may again be the leading sectors for transactions,
partially benefiting from a “domino effect” where corporates that were inactive in 2015 seek to replicate peer deal
success and related advantages. Amongst less active industries, commodity-related sectors affected by overcapacity
such as Oil & Gas and Mining could benefit from consolidation, although activity is likely to be dependent on
whether a clearer, more sustainable consensus emerges on commodity prices.
Source: J.P. Morgan, Dealogic as of January 8, 2016; M&A as a % of GDP is rounded to the nearest whole
number
What we can determine from this graph is the overview on the global M&A activity that has shown key determinants
and effects on helping to boost grown within JP Morgan. In 1996 the M&A was about 3% of the GDP and just over a
trillion on the overall global M&A deal value. Whereas throughout the years we have seen substantial growth in both
sectors, peaking in 2007, then slumping after the recession during 2008-2012. However recovering quickly with a
M&A global value deal of 5 trillion. The M&A in terms of GDP is also on the increase.
2015 was marked by many mega-sized transactions that led to a record year, 2016 may see a rise in volumes
supported by a greater number of deals. With the possibility of renewed and diversified activity from private equity
players, and new regions facing agitation from activist investors, 2016 may prove to be another exciting year in
M&A.
2016 key themes
Supportive deal environment continues: Dealmakers will benefit from factors supportive to M&A, and
businesses may take up numerous deals in a “domino effect” after observing successful peer transactions in
2015. It may also be a year with new areas of activity, such as those in commodity-related sectors
Balanced mix will characterize activity: Confident CEOs are armed with $6 trillion to pursue growth as well as
defensive combinations to enhance scale and fortify balance sheets weakened by commodity prices.
Additionally, private equity funds may increase their activity to deploy substantial available equity
Cross-border transactions will provide a significant source of value creation: As corporations seek external
growth, businesses are increasingly turning to cross-border transactions
Activist investors will continue to seek expansion: Activists are eyeing new geographies outside of North
America, increasingly Europe, the Middle East and Africa (EMEA) and Japan
4 Expected Trends for 2017
1. Supportive deal environment continues in 2016
A greater number of deals and new sectors may underpin increased M&A activity in 2016. Dealmakers will benefit
from supportive factors that helped drive 2015 M&A to its highest levels, though more numerous and smaller
transactions and new sectors may see the biggest uptick in 2016.

Acquirers should continue to aim for positive market reactions, but bring greater discipline to deal terms and
logic as investors exercise more discretion when reacting to deal announcements
Commodity-related sectors and Financial Institutions may see a rebound in activity in 2016
Asian outbound M&A will remain a significant factor in global transactions going forward as the region's
businesses look West for new sources of growth and value-add products and services for a rising middle-
class
2. A ‘balanced mix’ of deal activity will characterize 2016
The need to support slowly recovering earnings, match peers that have already benefited from transaction activity,
deploy significant cash reserves and overall boardroom confidence will help drive acquisitions. Deals will also be
driven by defensive combinations as corporate leaders seek opportunities to bolster their growth profile and/or
enhance expansion. Five years of stable growth has proven to chief executives that the post-recession recovery isn’t
fleeting, and armed with a massive cash reserve, corporate leaders have the means and confidence to pursue
acquisitions or to optimize their portfolio through corporate clarity actions.
$6 trillion in cash reserves held at the end of 2015 provides corporate leaders the firepower to make
acquisitions to improve earnings and consider hostile actions to deploy cash before they come under
pressure to return it to shareholders
Chief executives may also use 2016 to spin off and divest assets to achieve greater earnings growth and
corporate clarity
Private equity funds may play a more significant role in the year as private equity 'dry powder'—capital
available for investment purposes—nears records
3. Cross-border transactions will continue to provide a significant source of value creation
as corporations seek external growth in the global economy, businesses are increasingly turning to cross-
border transactions as an avenue for value creation.
Desire for higher growth markets, greater value-add products and services, and attractive valuation
opportunities are driving increases in outbound activity across regions
Europe may attract more inbound activity as there is better visibility around the return of growth to the
region which may not be fully reflected in market prices
Strong levels of Asian outbound activity are likely to continue

4. Activist investors will continue to seek expansion
Activism will continue to have a significant impact during 2016. With confidence built on U.S. successes, activists
may begin initiating campaigns in new geographies, notably EMEA and gradually Japan.
In addition to activist funds, traditional institutional investors are now engaging more forcefully with the senior
management and boards of the companies in which they invest and are contributing to the same activism effect.
With the U.S. and Canadian markets already quite active, many funds are turning to new regions for fresh
investment opportunities, particularly EMEA and steadily Japan. While activism may be slower to gain a foothold
in Western Europe, activist investors will continue to seek opportunities for geographic expansion as the region
becomes more stable and predictable following several years of uncertainty. Activists are also beginning to make
headlines across Asia with campaigns directed at companies controlled by family offices and corporate
monoliths, after critically seeing a string of activity in Japan in recent years.
Assets under management at activist hedge funds reached $122.9 billion in the fourth quarter of 2015
Activism is internationalizing just as shareholder bases are, and Japanese corporates may prove the next
geographic frontier
Structural and regulatory distinctions may cast activism in different guises, but investor activism is extending
its international reach
Source: JPM Morgan 2016 M&A global outlook report
https://www.jpmorgan.com/global/insights/maglobaloutlook
Executing the growth strategy
Summary key points:
Made great progress in executing their long-term growth strategy. They are building with patience and
discipline, hiring great bankers, picking the best clients and selectively expanding our loan portfolios.
Expanded there specialised industry model, they have 15 key dedicated industry teams working with more
than 9,000 clients and covering 12,000 prospects.
JP Morgan’s clients clearly benefit from their sector-specific knowledge and focused coverage; as a result
they’ve seen meaningful gains in market share across these important segments. 2015 marked the sixth year
of their Middle Market expansion strategy. Through this effort, they’ve added nearly 2,000 clients, and in
2015, they generated record revenue of $351 million across there expansion markets.
In the new regions mentioned above they are building organically which means, banker by banker, client by
client, which is essentially creating a nice-sized bank from scratch, ending 2015 with nearly $11 billion of
loans and over $8 billion in deposits.
Last year (2015) new offices opened in Fresno, California; Greenville, South Carolina; Hartford, Connecticut;
and Wilmington, Delaware.
JP Morgan believe that there building a commercial real estate business that is differentiated from our
competitors. “Our franchise consists of three well-coordinated businesses: Commercial Term Lending, Real
Estate Banking and Community Development Banking. Together, our real estate teams originated $32 billion
in loans in 2015, up 28% from the prior year. As the industry moves through the real estate cycle, we believe
we can continue to grow our portfolio safely by adding high- quality clients in large, established markets.”
Source: JP Morgan annual report 2015.
They see real opportunities to capture additional market share in targeted geographic areas while
maintaining our credit and pricing discipline. E.g. expanding in regions in Africa and Asia.
In 2015, the CDB team financed nearly 100 projects that created more than 10,000 units of affordable
housing. “One in particular, the Alice Griffith Community, located on Candlestick Point in San Francisco,
started its fourth phase of construction that will bring much needed affordable housing and amenities to the

area. The effort not only replaces a troubled public housing complex but also creates new affordable units
that will be linked with services, schools and access to jobs.” Source: JP Morgan annual report 2015
Strategic Alliances
Strategic alliances are important for any industry in order to access different parts of another industry, lower
risk of entry into new markets and share knowledge, expertise and capital.
Here is a table of JP Morgan’s partners and their individual sectors:
There are many partnerships that JP Morgan have with different sectors as shown above, clearly there are
ones more important that other and therefore will need analysing.
The banking and finance sector which includes firms such as Merrill Lynch and China trust commercial bank
are virtually same sector businesses as JP Morgan. Therefore why would competitors be Partners? Firstly it
means capital assets can be shared e.g. computers, software etc. Furthermore experience and knowledge of
both companies can improve its productivity and therefore profitability. Therefore combining these key skills
each firm has improves its ability to predict and compete.
Advertising and Marketing is also another key area of partnership for JP Morgan. They are known as an
investment bank but clearly want to be as commercial as a bank such as HSBC. Therefore advertising is a key
part in attracting customers, therefore having a partnership with advertising companies means better rates
and better insight into what advertising actually works.
Software and software development is also a key aspect for JP Morgan. Most of their work would be done
through special software’s that allow them to trade, invest and do many other things. Therefore having an
alliance with firms such as IBM and Microsoft means that they can get the highest quality software from
these firms. Furthermore they can advertise through Facebook through Facebook exchange, which uses
online data to look at recent browsing searches. So for example Banking or bank accounts may be searched
online, it may then pop up as a remarketing add on Facebook. This type of advertising enforces the banks
probability of being viewed.
Consumer services, travel agencies and services are also another key area for JP Morgan. This is because JP
Morgan have many clients and employees who need to travel for either business or leisure purposes.
Therefore having partners who are an airline industry means possibly cheaper flights, possible priority flights
and means no need to purchase or create their own airline firm.
Telecommunications and telephony & wireless are also another important alliance to have. This is because
connection to other firms and clients is crucial. Therefore having alliances with a huge firm such as BT means
high quality telecoms, cheaper services and access to information in the market that could benefit JP
Morgan.

Bullish Arguments
Technical Analysis:
Overview Analysis - Daily Chart
11th
of December 2013 – 24th
of October 2016
Above is the JP Morgan Chase & Co share price over 2.5 years, using a daily chart. We are utilising three indicators
for our analysis; EMAS (25, 50, 100), RSI and primary indicators (support, resistance and trend lines).
We have identified two major support levels (H1 $66.18 & H2 $67.5), two major resistance levels (H3 $68.46 & H4
$70) and the current trend line since the Brexit vote.
The RSI (Relative Strength Index) is utilised for buy and sell signals, as shown with the highlighted circles. Circle 2.A
on the RSI chart, shows a buy signal, when the RSI enters the oversold area (30%) and exits it, corresponding to the
circle 1.A on the price chart.
Also, sell signals are used, in our case for a potential exit of our trade, as shown with circles 2.B on the RSI chart and
1.B on the price chart.
Bullish Arguments:
We can see on the 8th
of February, JP Morgan’s stock price has appreciated in price, up until the Brexit vote on the
23rd
of June 2016. Since the Brexit Vote, where the stock price depreciated in value, JP Morgan has fared well.
Appreciating from a price of $57.58 to today’s price of $67.88, clearly following a trend since the national
referendum.
Recommended price of JP Morgan is a price target of $70 dollars per share, because it is a major big value resistance
level and it is very close to the all-time high of $70.63. Assuming, that the market will push through resistance level
H3 ($68.46), which it has already done.
All the EMAs (Exponential Moving Average) are showing reaffirming the positive momentum, with all respective
EMAs spread out, with the 25 EMA closest to price, 50 EMA next closest and the 100 EMA furthest away from price.
RSI is in the overbought zone of 70% level, which should raise slight concern, however it is in harmony with the
market, as it is in an upward movement (which is drawn with a trend line in the RSI chart). The RSI is also not
showing any divergence with the market, for a potential sell signal. Thus, the RSI does not raise enough concern to,
to prepare for a potential bearish move.
Thus, the longer-term view on the daily chart suggests that JP Morgan Chase & Co. is continuing its current price
movement, with potential price volatility due to retracement towards the current trend line.
Macro - Analysis

Research states that Democratic leaders show higher potential for stock markets rather than republicans as shown in
the table below (Table 1). This can be further enforced since JP Morgan, Morgan Stanley, Goldman Sachs and Citi
group have all supported Hilary Clinton, showing they have faith that a democratic president will improve the stock
market, as shown in table 2. Donald trump on the other hand, only has 1 investment company, RHS investments,
shown in table 3.
Table 1; Performance of stock market and elected party
Reference: http://www.forbes.com/sites/peterlazaroff/2016/07/26/democrats-vs-republicans-who-is-better-
for-the-stock-market/#158b18b35bfb
Table 2; List of contributors to Hillary Clinton Campaign
Reference: https://www.opensecrets.org/politicians/contrib.php?cid=N00000019&cycle=Career

Table 3; Donald Trump Contributors
Reference: https://www.opensecrets.org/pres16/cont
Proposed Execution (Buy) of Trade: Part of Bullish Argument
Execution Analysis & Short-Term Analysis – 4h Chart
Execution (4h)
22nd
of June 2016 – 24th
of October 2016
Above is the JP Morgan Chase & Co share price over 9 months, using a four-hourly chart. We are utilising three
indicators for our execution analysis; EMAS (25, 50, 100), RSI and primary indicators (support, resistance and trend
lines).
We have identified two support levels (H1 $66.18 & H2 $67.17), one resistance level (H3 $68.46) and the current
trend line since the Brexit vote. Take note of the highest price $69.01 of the last 9 months, which would be used as a
resistance level. If the market breaks this price level, the market would be sure to continue its upward trend (with
confirmation with other indicators).
These levels are only used for short-term horizon, as we are intending to hold the stock for a longer term, we will be
utilising the levels from the previous overview analysis.
Execution:

Below is the procedure of the execution
1) Look for a retracement towards the trend line.
a. As highlighted in circle 1.C
i. Expect the EMAs to cross downwards as shown in 1.B and the RSI moving downward with
the market towards the RSI’s trending line and the 30% level.
2) A counter trend line will be possible to draw.
a. As in 1.A
3) Wait for the market to break the Counter trend line.
a. As in 1.A
4) With confirmation with EMAs crossing each other upwards (25 EMA crossing the 50 EMA from below
upwards).
a. As in 1.B
5) Execute trade on the close of the price, when the market has broken the counter trend line.
The stop-loss will be at the support line H1 (concededly at the same price as the 100 EMA).
Beware, to take care, that the market does not break through the major trend line, when waiting for the market to
break your counter trend line. If the market breaks the major trend line, this may be a sign of the market turning to a
bearish market.
Dividends and forecasts
Dividends- Dividends for JPMorgan Chase & Co have been up on the rise every year from 2011. In 2015 JP
reported a dividend of 1.72 USD, which represents a 8.86% increase over last. The 28 analysts covering the
company expected dividends of 1.88 USD for the upcoming fiscal year, an increase of 9.13%. Theses analysts
have given accurate forecasts from 2011 to 2015, therefore these forecasts for 2017 are looking bright.
Currently dividend prices are at 2.81% 1.92$ so pretty high, however not as much as other banks getting
around 3$
Forecasts- the forecasts state that share price will increase by highs of 15.3%, bringing the share value up to
70.99$ and by meds of 7.3% brining the share value up to 73.50$. These numbers and forecasts have been
given by 28 analysts offering 12 month price targets for JPMorgan Chase & Co.
Bearish Arguments
Technical Analysis

11th
of December 2013 – 24th
of October 2016
We can see on the 8th
of February, JP Morgan’s stock price has appreciated in price, up until the Brexit vote on the
23rd
of June 2016. Since the Brexit Vote, where the stock price depreciated in value, JP Morgan has fared well.
Appreciating from a price of $57.58 to today’s price of $67.88, clearly following a trend since the national
referendum.
Recommended price of JP Morgan is a price target of $70 dollars per share, because it is a major big value resistance
level and it is very close to the all-time high of $70.63. Assuming, that the market will push through resistance level
H3 ($68.46), which it has already done.
All the EMAs (Exponential Moving Average) are showing reaffirming the positive momentum, with all respective
EMAs spread out, with the 25 EMA closest to price, 50 EMA next closest and the 100 EMA furthest away from price.
RSI is in the overbought zone of 70% level, which should raise slight concern, however it is in harmony with the
market, as it is in an upward movement (which is drawn with a trend line in the RSI chart). The RSI is also not
showing any divergence with the market, for a potential sell signal. Thus, the RSI does not raise enough concern to,
to prepare for a potential bearish move.
Thus, the longer-term view on the daily chart suggests that JP Morgan Chase & Co. is continuing its current price
movement, with potential price volatility due to retracement towards the current trend line.
Macro Analysis
JP Morgan is an overall strong firm, which has high potential and many advantages over its rivals. However,
everything has its negatives and therefore it is also important to consider these when making an investment.
Firstly JP Morgan is clearly the strongest competitor in its sector. It has the highest net income for 2015 at $24.44
billion, compared to Goldman Sachs at $6.08 billion and Morgan Stanley at $6.13 billion. However, it seems that it is
not competition that is going to affect JP Morgan but either JP Morgan itself or external economic impacts such as
Brexit. Lawsuits such as the Lehman brothers have pay-outs of $1.42 billion as well as other lawsuits for JP Morgan
also accumulating to similar amounts. This is money thrown away for issues such as prostitution and other illegal
activities.
Economic impacts such as Brexit have also had an impact on JP Morgan, clearly affecting there share price and fees
due to uncertainty in the markets. The next economic event being the US elections could also be a bearish point for
JP Morgan, so is now the time to invest?
UK interest rates may also have a negative effect on JP Morgan’s lending profits. This is because the UK base rate is
0.25% whereas the US base rate is 0.5%. Therefore, big firms with huge transactions may prefer to go for the
cheaper option of the UK. Especially when the exchange rate for £ to $ is falling, currently at 1.22. This would be
beneficial since for example a US firm could borrow £1 million and exchange that at the current rate of $1.22 million.
With a falling exchange rate, next month, the rate could be 1.10, therefore the US firm could keep $0.12 million and
only need to give back $1.10 million plus small interest to clear the debt.

Furthermore, there is speculation of a rise in interest rate for the US by the Federal Reserve; therefore, this would
furthermore disadvantage JP in comparison with the UK.
Reference: (Interest Rates)
http://www.afr.com/news/special-reports/forex/slow-pace-of-us-interest-rate-rises-to-continue-20161020-gs7gah
Proposed Exit Strategy
Exit (4h - Chart)
22nd
of June 2016 – 24th
of October 2016
Via a technical point of view we would exit the trade when the market breaks the current trend line, with
confirmation of the EMAs crossing each other in a downward movement and the RSI showing either;
divergence, breaking its trend line or exiting the overbought 70% level.
This Buy Proposal was initiated by _________________
The relevant research was carried out by _____________________
The proposal was presented by ____________________
# of Votes for:
# of Votes against:
DECISION REASON
*To be competed after discussion of proposal at an ordinary meeting
Secretary: (Name of Secretary)

JP Morgan Company Analysis: Leading Global Bank by Market Cap

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