JPM 2023 compared with 2022

Noninterest revenue was $15.1 billion, up 2%, driven by: •higher asset management fees due to the impact of First Republic as well as higher market levels and strong net inflows, higher commissions on annuity sales in BWM and higher other service fees associated with First Republic, •higher net interchange income on increased debit and credit card sales volume, and


JPM 2023 compared with 2022

–In Card Services, higher annual fees and the higher net interchange income were more than offset by an increase in amortization related to new account origination costs, reflecting continued growth. Net interchange income in Card Services also reflected the impact of a reduction in rewards costs and partner payments in the first quarter of 2023 related to a periodic tax refund on airline miles redeemed and an increase to the rewards liability due to adjustments to certain reward program terms in the second quarter of 2023; •higher travel-related commissions in Card Services,


JPM predominantly offset by

•lower auto operating lease income as a result of a decline in volume, and •lower mortgage fees and related income in Home Lending.


JPM Refer to Note 6 for additional information on card income,

asset management fees, and commissions and other fees; and Critical Accounting Estimates on pages 155–158 for credit card rewards liability.


Refer to Note 15 for further information regarding changes in the value of the MSR asset and related hedges, and mortgage fees and related income.


Refer to Note 34 for additional information on the First Republic acquisition.


Noninterest expense was $34.8 billion, up 12%, reflecting: •higher compensation expense, driven by an increase in employees, including the impact of First Republic in the second half of 2023 and additions primarily in bankers, advisors and technology, wage inflation and higher revenue-related compensation, as well as •higher noncompensation expense, driven by the impact of First Republic, investments in marketing and technology, the increase in the FDIC assessment announced in the prior year as well as higher legal expense, partially offset by lower auto lease depreciation on lower auto lease assets.


The provision for credit losses was $6.9 billion, reflecting: •net charge-offs of $5.3 billion, up $2.6 billion, predominantly driven by Card Services, as the portfolio continued to normalize to pre-pandemic levels, •a $1.2 billion net addition to the allowance for credit losses, which included $1.4 billion in Card Services, partially offset by a net reduction of $200 million in Home Lending. The net addition in Card Services was driven by loan growth, including an increase in revolving balances, partially offset by reduced borrower uncertainty. The net reduction in Home Lending was driven by improvements in the outlook for home prices; and •$408 million to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.


The provision in the prior year was $3.8 billion, driven by net charge-offs of $2.7 billion and a $1.1 billion net addition to the allowance for credit losses across CCB.


Refer to Credit and Investment Risk Management on pages 111–134 and Allowance for Credit Losses on pages 131–133 for a further discussion of the credit portfolios and the allowance for credit losses.


JPM JPMorgan Chase & Co./2023 Form 10-K 69

##Selected metrics################ As of or for the year ended December 31,################## (in millions, except employees)####2023########2022######2021 Selected balance sheet data (period-end)################## Total assets##$####642,951####$####514,085##$##500,370 Loans:################## Banking & Wealth Management(a)####31,142####(d)####29,008######35,095 Home Lending(b)####259,181####(d)####172,554######180,529 Card Services####211,175########185,175######154,296 Auto####77,705########68,191######69,138 Total loans####579,203########454,928######439,058 Deposits####1,094,738####(e)####1,131,611######1,148,110 Equity####55,500########50,000######50,000 Selected balance sheet data (average)################## Total assets##$####584,367####$####497,263##$##489,771 Loans:################## Banking & Wealth Management####30,142####(f)####31,545######44,906 Home Lending(c)####232,115####(f)####176,285######181,049 Card Services####191,424########163,335######140,405 Auto####72,674########68,098######67,624 Total loans####526,355########439,263######433,984 Deposits####1,126,552####(g)####1,162,680######1,054,956 Equity####54,349########50,000######50,000 Employees####141,640########135,347######128,863


(a)At December 31, 2023, 2022 and 2021, included $94 million, $350 million and $5.4 billion of loans, respectively, in Business Banking under the PPP.


(b)At December 31, 2023, 2022 and 2021, Home Lending loans held-for-sale and loans at fair value were $3.4 billion, $3.0 billion and $14.9 billion, respectively.


(c)Average Home Lending loans held-for sale and loans at fair value were $4.8 billion, $7.3 billion and $15.4 billion for the years ended December 31, 2023, 2022 and 2021, respectively.


(d)At December 31, 2023, included $4.0 billion and $90.7 billion for Banking & Wealth Management and Home Lending, respectively, associated with First Republic.


(e)Includes First Republic. In the fourth quarter of 2023, CCB transferred certain deposits associated with First Republic to AWM, CB, and CIB. Refer to page 67 for additional information.


(f)Average Banking & Wealth Management and Home Lending loans associated with First Republic were $2.4 billion and $60.2 billion, respectively, for the year ended December 31, 2023.


(g)Included $39.4 billion associated with First Republic for the year ended December 31, 2023. ##Selected metrics################ As of or for the year ended December 31,################## (in millions, except ratio data)####2023######2022######2021## Credit data and quality statistics################## Nonaccrual loans(a)(b)##$##3,740####$##3,899####$##4,875## Net charge-offs/(recoveries)################## Banking & Wealth Management####340######370######289## Home Lending####(56)######(229)######(275)## Card Services####4,699######2,403######2,712## Auto####357######144######35## Total net charge-offs/(recoveries)##$##5,340####$##2,688####$##2,761## Net charge-off/(recovery) rate################## Banking & Wealth Management(c)####1.13##%####1.17##%####0.64##% Home Lending####(0.02)######(0.14)######(0.17)## Card Services####2.45######1.47######1.94## Auto####0.49######0.21######0.05## Total net charge-off/(recovery) rate####1.02##%####0.62##%####0.66##% 30+ day delinquency rate################## Home Lending(d)(e)####0.66##%####0.83##%####1.25##% Card Services####2.14######1.45######1.04## Auto####1.19######1.01######0.64## 90+ day delinquency rate - Card Services####1.05##%####0.68##%####0.50##% Allowance for loan losses################## Banking & Wealth Management##$##685####$##722####$##697## Home Lending####578##(f)####867######660## Card Services####12,453######11,200######10,250## Auto####742######715######733## Total allowance for loan losses##$##14,458##(g)##$##13,504####$##12,340##


(a)At December 31, 2023, 2022 and 2021, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $123 million, $187 million and $342 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.


(b)At December 31, 2023, 2022 and 2021, generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic.


(c)At December 31, 2023, 2022 and 2021, included $94 million, $350 million and $5.4 billion of loans, respectively, in Business Banking under the PPP. The Firm does not expect to realize material credit losses on PPP loans because the loans are guaranteed by the SBA.


(d)At December 31, 2023, 2022 and 2021, the principal balance of loans under payment deferral programs offered in response to the COVID-19 pandemic was $29 million, $449 million and $1.1 billion in Home Lending, respectively. Loans that are performing according to their modified terms are generally not considered delinquent.


(e)At December 31, 2023, 2022 and 2021, excluded mortgage loans insured by U.S. government agencies of $176 million, $258 million and $405 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.


(f)Includes First Republic.


(g)On January 1, 2023, the Firm adopted changes to the TDR accounting guidance. The adoption of this guidance resulted in a net decrease in the allowance for loan losses of $591 million, driven by residential real estate and credit card. Refer to Note 1 for further information.


JPM 70 JPMorgan Chase & Co./2023 Form 10-K

##Selected metrics################ As of or for the year ended December 31,################## (in billions, except ratios and where otherwise noted)####2023######2022######2021## Business Metrics################## CCB Consumer customers (in millions)(a)####82.1##(g)####79.2######76.5## CCB Small business customers (in millions)(a)####6.4##(g)####5.7######5.3## Number of branches####4,897######4,787######4,790## Active digital customers  (in thousands)(b)####66,983##(g)####63,136######58,857## Active mobile customers  (in thousands)(c)####53,828##(g)####49,710######45,452## Debit and credit card sales volume##$##1,678.6####$##1,555.4####$##1,360.7## Total payments transaction volume (in trillions)(d)####5.9##(g)####5.6######5.0## ##Banking & Wealth Management################ Average deposits##$##1,111.7##(h)##$##1,145.7####$##1,035.4## Deposit margin####2.84##%####1.71##%####1.27##% Business Banking average loans##$##19.6####$##22.3####$##37.5## Business Bankingorigination volume####4.8######4.3######13.9##(j) Client investment assets(e)####951.1######647.1######718.1## Number of client advisors####5,456######5,029######4,725## Home Lending################## Mortgage origination volume by channel################## Retail##$##22.4##(i)##$##38.5####$##91.8## Correspondent####12.7######26.9######70.9## Total mortgage origination volume(f)##$##35.1####$##65.4####$##162.7## Third-party mortgage loans serviced (period-end)##$##631.2####$##584.3####$##519.2## MSR carrying value(period-end)####8.5######8.0######5.5## Card Services################## Sales volume, excluding commercial card##$##1,163.6####$##1,064.7####$##893.5## Net revenue rate####9.72##%####9.87##%####10.51##% Net yield on average loans####9.61######9.77######9.88## New credit card accounts opened (in millions)####10.0######9.6######8.0## Auto################## Loan and lease origination volume##$##41.3####$##30.4####$##43.6## Average auto operating lease assets####10.9######14.3######19.1##


(a)The Consumer and Small business customers metrics include unique individuals, and businesses and legal entities, respectively, that have financial ownership or decision-making power with respect to accounts; these metrics exclude customers under the age of 18. Where a customer uses the same unique identifier as both a Consumer and a Small business, the customer is included in both metrics. For information concerning the Households metric previously disclosed, refer to the Glossary of terms and acronyms on pages 315-321.


(b)Users of all web and/or mobile platforms who have logged in within the past 90 days.


(c)Users of all mobile platforms who have logged in within the past 90 days.


(d)Total payments transaction volume includes debit and credit card sales volume and gross outflows of ACH, ATM, teller, wires, BillPay, PayChase, Zelle, person-to-person and checks.


(e)Includes assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager. Refer to AWM segment results on pages 81–83 for additional information. At December 31, 2023, included $144.6 billion of client investment assets associated with First Republic.


(f)Firmwide mortgage origination volume was $41.4 billion, $81.8 billion and $182.4 billion for the years ended December 31, 2023, 2022 and 2021, respectively.


(g)Excludes First Republic.


(h)Included $39.4 billion for the year ended December 31, 2023, associated with First Republic.


(i)Included $2.3 billion for the year ended December 31, 2023, associated with First Republic.


(j)Included origination volume under the PPP of $10.6 billion for the year ended December 31, 2021. The program ended on May 31, 2021 for new applications.


JPM CORPORATE & INVESTMENT BANK

The Corporate & Investment Bank, which consists of Banking and Markets & Securities Services, offers a broad suite of investment banking, market-making, prime brokerage, lending, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, government and municipal entities. Banking offers a full range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Banking also includes Payments, which provides services, that enable clients to manage payments globally across liquidity and account solutions, commerce solutions, clearing, trade and working capital. Markets & Securities Services includes Markets, a global market-maker across products, including cash and derivative instruments, which also offers sophisticated risk management solutions, prime brokerage, clearing and research. Markets & Securities Services also includes Securities Services, a leading global custodian which provides custody, fund accounting and administration, and securities lending products principally for asset managers, insurance companies and public and private investment funds. ######Selected income statement data############ Year ended December 31,################## (in millions)####2023######2022######2021## Revenue################## Investment banking fees(a)##$##6,582####$##6,929####$##13,359## Principal transactions####23,671######19,926######15,764## Lending- and deposit-related fees####2,213######2,419######2,514## Commissions and other fees####4,821######5,058######4,995## Card income####1,450######1,249##(c)####1,108##(c) All other income####1,578######621##(c)####663##(c) Noninterest revenue####40,315######36,202######38,403## Net interest income####8,492######11,900######13,540## Total net revenue(b)####48,807######48,102######51,943## Provision for credit losses####121######1,158######(1,174)## Noninterest expense################## Compensation expense####14,345######13,918######13,096## Noncompensation expense####14,249######13,432##(c)####12,457##(c) Total noninterest expense####28,594######27,350######25,553## Income before income tax expense####20,092######19,594######27,564## Income tax expense####5,963######4,669##(c)####6,457##(c) Net income##$##14,129####$##14,925####$##21,107##


JPM CORPORATE & INVESTMENT BANK

(a)Includes CB's share of revenue from investment banking products sold to CB clients through the CIB that is subject to a revenue sharing arrangement which is reported as a reduction in All other income.


JPM CORPORATE & INVESTMENT BANK

(b)Includes tax-equivalent adjustments, predominantly due to income tax credits and other tax benefits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income


JPM CORPORATE & INVESTMENT BANK

from municipal bonds of $3.6 billion, $3.0 billion and $3.0 billion for the years ended December 31, 2023, 2022 and 2021, respectively.


JPM CORPORATE & INVESTMENT BANK

(c)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation. ########Selected income statement data################ Year ended December 31,######################## (in millions, except ratios)####2023########2022########2021#### Financial ratios######################## Return on equity####13##%######14##%######25##%## Overhead ratio####59########57########49#### Compensation expense as percentage of total net  revenue####29########29########25#### Revenue by business######################## Investment Banking##$####6,243####$####6,510####$####12,506## Payments####9,273########7,579####(b)####6,464####(b) Lending####1,007########1,377########1,001#### Total Banking####16,523########15,466########19,971#### Fixed Income Markets####18,813########18,617########16,865#### Equity Markets####8,979########10,367########10,529#### Securities Services####4,772########4,488########4,328#### Credit Adjustments & Other(a)####(280)########(836)########250#### Total Markets & Securities  Services####32,284########32,636########31,972#### Total net revenue##$##48,807######$####48,102####$##51,943####


JPM CORPORATE & INVESTMENT BANK

(a)Consists primarily of centrally managed credit valuation adjustments ("CVA"), funding valuation adjustments ("FVA") on derivatives, other valuation adjustments, and certain components of fair value option elected liabilities, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets. Refer to Notes 2, 3 and 24 for additional information.


JPM CORPORATE & INVESTMENT BANK

(b)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.


JPM 2023 compared with 2022

Net income was $14.1 billion, down 5%.


JPM 2023 compared with 2022

Net revenue was $48.8 billion, up 1%.


JPM 2023 compared with 2022

Banking revenue was $16.5 billion, up 7%. •Investment Banking revenue was $6.2 billion, down 4%. Excluding $257 million of markdowns on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio recorded in the second quarter of 2022, Investment Banking revenue was down 8%. Investment Banking fees were down 5%, driven by lower advisory and debt underwriting fees, partially offset by higher equity underwriting fees. The Firm ranked #1 for Global Investment Banking fees, according to Dealogic.


JPM 2023 compared with 2022

–Advisory fees were $2.8 billion, down 8%, due to a lower number of completed transactions, reflecting the lower level of announced deals in the current and the prior year amid a challenging environment.


JPM 2023 compared with 2022

–Debt underwriting fees were $2.6 billion, down 8%, as challenging market conditions, primarily in the first half of the year, resulted in lower issuance activity across leveraged loans, investment-grade loans, and high-grade bonds. This was largely offset by higher issuance activity in high-yield bonds driven by higher industry-wide issuance.


JPM 2023 compared with 2022

–Equity underwriting fees were $1.2 billion, up 11%, driven by a higher level of follow-on offerings due to lower equity market volatility and a higher level of convertible securities offerings which benefited from higher rates, partially offset by lower activity in private placements amid a challenging environment. •Payments revenue was $9.3 billion, up 22%, driven by deposit margin expansion on higher rates and fees, partially offset by the higher level of client credits that reduce such fees and lower average deposits. The net impact of equity investments was flat reflecting net markdowns in both periods, including the impact of an impairment in the current year. •Lending revenue was $1.0 billion, down 27%, driven by $494 million of fair value losses on hedges of retained loans which included an increase in hedging activity, compared to $27 million of gains in the prior year, partially offset by higher net interest income.


JPM 2023 compared with 2022

Markets & Securities Services revenue was $32.3 billion, down 1%. Markets revenue was $27.8 billion, down 4%. •Fixed Income Markets revenue was $18.8 billion, up 1%, driven by an increase in finance and trading activity in the Securitized Products Group and improved performance in Credit Trading, predominantly offset by lower revenue in Currencies & Emerging Markets as the business substantially normalized from the prior year’s elevated levels of volatility and client activity. •Equity Markets revenue was $9.0 billion, down 13%, driven by lower revenue in Equity Derivatives and Cash Equities, compared with a stronger performance in the prior year. •Securities Services revenue was $4.8 billion, up 6%, driven by deposit margin expansion on higher rates, largely offset by lower average deposits and fees. •Credit Adjustments & Other was a loss of $280 million, compared with a loss of $836 million in the prior year.


JPM 2023 compared with 2022

Noninterest expense was $28.6 billion, up 5%, driven by higher legal expense, compensation expense, including the impact of wage inflation, and higher indirect tax expense.


JPM 2023 compared with 2022

The provision for credit losses was $121 million, driven by net charge-offs of $272 million, up $190 million, driven by single name exposures, largely offset by a $151 million net reduction in the allowance for credit losses.


JPM 2023 compared with 2022

The net reduction in the allowance was driven by the impact of changes in the loan and lending-related commitment portfolios and the net effect of changes in the Firm’s weighted average macroeconomic outlook, predominantly offset by an addition for certain accounts receivable and net downgrade activity.


JPM 2023 compared with 2022

The provision in the prior year was $1.2 billion, predominantly driven by a net addition to the allowance for credit losses.


JPM JPMorgan Chase & Co./2023 Form 10-K 73

##Selected metrics########## As of or for the year ended  December 31, (in millions, except employees)############ ####2023####2022####2021 Selected balance sheet data (period-end)############ Total assets##$##1,338,168##$##1,334,296##$##1,259,896 Loans:############ Loans retained(a)####197,523####187,642####159,786 Loans held-for-sale and loans at fair value(b)####38,919####42,304####50,386 Total loans####236,442####229,946####210,172 Equity####108,000####103,000####83,000 Selected balance sheet data (average)############ Total assets##$##1,428,904##$##1,406,250##$##1,334,518 Trading assets-debt and equity instruments####508,799####405,916####448,099 Trading assets-derivative receivables####63,836####77,802####68,203 Loans:############ Loans retained(a)####190,601####172,627####145,137 Loans held-for-sale and loans at fair value(b)####39,831####46,846####51,072 Total loans####230,432####219,473####196,209 Deposits####728,537####739,700####760,048 Equity####108,000####103,000####83,000 Employees####74,404####73,452####67,546


(a)Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.


(b)Loans held-for-sale and loans at fair value primarily reflect lending related positions originated and purchased in CIB Markets, including loans held for securitization. Selected metrics################## As of or for the year ended December 31, (in millions, except ratios)################## ####2023######2022######2021## Credit data and quality statistics################## Net charge-offs/(recoveries)##$##272####$##82####$##6## Nonperforming assets:################## Nonaccrual loans:################## Nonaccrual loans retained(a)####866######718######584## Nonaccrual loans held-for-sale and loans at fair value(b)####828######848######844## Total nonaccrual loans####1,694######1,566######1,428## Derivative receivables####364######296######316## Assets acquired in loan satisfactions####115######87######91## Total nonperforming assets####2,173######1,949######1,835## Allowance for credit losses:################## Allowance for loan losses####2,321######2,292######1,348## Allowance for lending-related commitments####1,048######1,448######1,372## Total allowance for credit losses####3,369######3,740######2,720## Net charge-off/(recovery) rate(c)####0.14##%####0.05##%####—##% Allowance for loan losses to period-end loans  retained####1.18######1.22######0.84## Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(d)####1.64######1.67######1.12## Allowance for loan losses to nonaccrual loans  retained(a)####268######319######231## Nonaccrual loans to total period-end loans####0.72######0.68######0.68##


(a)Allowance for loan losses of $95 million, $104 million and $58 million were held against these nonaccrual loans at December 31, 2023, 2022 and 2021, respectively.


(b)At December 31, 2023, 2022 and 2021, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $59 million, $115 million and $281 million, respectively. These amounts have been excluded based upon the government guarantee.


(c)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.


(d)Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 62–64.


JPM 74 JPMorgan Chase & Co./2023 Form 10-K

Investment banking fees############ ########Year ended December 31,#### (in millions)####2023####2022####2021 Advisory##$##2,814##$##3,051##$##4,381 Equity underwriting####1,151####1,034####3,953 Debt underwriting(a)####2,617####2,844####5,025 Total investment banking fees##$##6,582##$##6,929##$##13,359


(a)Represents long-term debt and loan syndications. ##############League table results – wallet share################ ######2023##########2022##########2021#### Year ended December 31,####Rank####Share######Rank####Share######Rank####Share## Based on fees(a)############################## M&A(b)############################## Global#####2####9.3##%#####2####7.9##%#####2####9.6##% U.S.####2####11.2######2####9.0######2####10.7## Equity and equity-related(c)############################## Global####1####7.8######2####5.7######3####8.8## U.S.####1####14.1######1####13.9######2####11.8## Long-term debt(d)############################## Global####1####7.2######1####6.9######1####8.4## U.S.####1####10.9######1####12.2######1####12.1## Loan syndications############################## Global####1####12.1######1####11.0######1####10.9## U.S.####1####15.1######1####12.8######1####12.6## Global investment banking fees(e)#####1####8.8##%#####1####7.8##%#####1####9.3##%


(a)Source: Dealogic as of January 2, 2024. Reflects the ranking of revenue wallet and market share.


(b)Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.


(c)Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.


(d)Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities ("ABS") and mortgage-backed securities ("MBS"); and exclude money market, short-term debt, and U.S. municipal securities.


(e)Global investment banking fees exclude money market, short-term debt and shelf securities.


JPM Markets revenue

The following table summarizes selected income statement data for the Markets businesses. Markets includes both Fixed Income Markets and Equity Markets. Markets revenue consists of principal transactions, fees, commissions and other income, as well as net interest income. The Firm assesses its Markets business performance on a total revenue basis, as offsets generally occur across revenue line items. For example, securities that generate net interest income may be risk-managed by derivatives that are reflected at fair value in principal transactions revenue. Refer to Notes 6 and 7 for a description of the composition of these income statement line items.


JPM Markets revenue

Principal transactions reflects revenue on financial instruments and commodities transactions that arise from client-driven market-making activity. Principal transactions revenue includes amounts recognized upon executing new transactions with market participants, as well as “inventory-related revenue”, which is revenue recognized from gains and losses on derivatives and other instruments that the Firm has been holding in anticipation of, or in response to, client demand, and changes in the fair value of instruments used by the Firm to actively manage the risk exposure arising from such inventory. Principal transactions revenue recognized upon executing new transactions with market participants is affected by many factors including the level of client activity, the bid-offer spread (which is the


JPM Markets revenue

difference between the price at which a market participant is willing and able to sell an instrument to the Firm and the price at which another market participant is willing and able to buy it from the Firm, and vice versa), market liquidity and volatility. These factors are interrelated and sensitive to the same factors that drive inventory-related revenue, which include general market conditions, such as interest rates, foreign exchange rates, credit spreads, and equity and commodity prices, as well as other macroeconomic conditions.


JPM JPMorgan Chase & Co./2023 Form 10-K 75

For the periods presented below, the primary source of principal transactions revenue was the amount recognized upon executing new transactions. ########2023############2022############2021#### Year ended December 31, (in millions, except where otherwise noted)####Fixed Income Markets####Equity Markets####Total Markets####Fixed Income Markets####Equity Markets####Total Markets####Fixed Income Markets####Equity Markets####Total Markets Principal transactions##$##12,064##$##11,514##$##23,578##$##11,682##$##8,846##$##20,528##$##7,911##$##7,519##$##15,430 Lending- and deposit-related fees####307####40####347####303####22####325####321####17####338 Commissions and other fees####596####1,908####2,504####550####1,975####2,525####545####1,948####2,493 All other income####1,744####(87)####1,657####916####(99)####817####972####(82)####890 Noninterest revenue####14,711####13,375####28,086####13,451####10,744####24,195####9,749####9,402####19,151 Net interest income(a)####4,102####(4,396)####(294)####5,166####(377)####4,789####7,116####1,127####8,243 Total net revenue##$##18,813##$##8,979##$##27,792##$##18,617##$##10,367##$##28,984##$##16,865##$##10,529##$##27,394 Loss days(b)########3############7############4####


(a)The decline in Markets net interest income was driven by higher funding costs.


(b)Loss days represent the number of days for which Markets, which consists of Fixed Income Markets and Equity Markets, posted losses to total net revenue. The loss days determined under this measure differ from the measure used to determine backtesting gains and losses. Daily backtesting gains and losses include positions in the Firm’s Risk Management value-at-risk ("VaR") measure and exclude certain components of total net revenue, which may more than offset backtesting gains or losses on a particular day. For more information on daily backtesting gains and losses, refer to the VaR discussion on pages 137–139. Selected metrics############ As of or for the year ended December 31, (in millions, except where otherwise noted)####2023####2022####2021 Assets under custody ("AUC") by asset class (period-end) (in billions):############ Fixed Income##$##15,543##$##14,361##$##16,098 Equity####12,927####10,748####12,962 Other(a)####3,922####3,526####4,161 Total AUC##$##32,392##$##28,635##$##33,221 Merchant processing volume (in billions)(b)##$##2,408##$##2,158##$##1,887 Client deposits and other third party liabilities (average)(c)##$##645,074##$##687,391##$##714,910


(a)Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.


(b)Represents Firmwide merchant processing volume.


(c)Client deposits and other third-party liabilities pertain to the Payments and Securities Services businesses.


JPM 76 JPMorgan Chase & Co./2023 Form 10-K

##International metrics############## As of or for the year ended December 31, (in millions, except where otherwise noted)####2023####2022######2021## Total net revenue(a)################ Europe/Middle East/Africa##$##13,725##$##15,303####$##13,954## Asia-Pacific####7,607####7,846######7,555## Latin America/Caribbean####2,094####2,239######1,833## Total international net revenue####23,426####25,388######23,342## North America####25,381####22,714##(c)####28,601##(c) Total net revenue##$##48,807##$##48,102####$##51,943## Loans retained (period-end)(a)################ Europe/Middle East/Africa##$##42,792##$##39,424####$##33,084## Asia-Pacific####14,333####15,571######14,471## Latin America/Caribbean####8,341####8,599######7,006## Total international loans####65,466####63,594######54,561## North America####132,057####124,048######105,225## Total loans retained##$##197,523##$##187,642####$##159,786## Client deposits and other third-party liabilities (average)(b)################ Europe/Middle East/Africa##$##230,225##$##247,203####$##243,867## Asia-Pacific####126,918####129,134######132,241## Latin America/Caribbean####39,134####39,917######46,045## Total international##$##396,277##$##416,254####$##422,153## North America####248,797####271,137######292,757## Total client deposits and other third-party liabilities##$##645,074##$##687,391####$##714,910## AUC (period-end)(b) (in billions)################ North America##$##21,792##$##19,219####$##21,655## All other regions####10,600####9,416######11,566## Total AUC##$##32,392##$##28,635####$##33,221##


(a)Total net revenue and loans retained (excluding loans held-for-sale and loans at fair value) are based on the location of the trading desk, booking location, or domicile of the client, as applicable.


(b)Client deposits and other third-party liabilities pertaining to the Payments and Securities Services businesses, and AUC, are based on the domicile of the client.


(c)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.


JPM COMMERCIAL BANKING

Commercial Banking provides comprehensive financial solutions, including lending, payments, investment banking and asset management products across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Real Estate Banking. Other includes amounts not aligned with a primary client segment. Middle Market Banking covers small and midsized companies, local governments and nonprofit clients. Corporate Client Banking covers large corporations.  Commercial Real Estate Banking covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties. ##Selected income statement data############ Year ended December 31, (in millions)####2023######2022####2021 Revenue############## Lending- and deposit-related fees##$##1,210##(b)##$##1,243##$##1,392 Card income####763######685####624 All other income####1,521######1,408####1,913 Noninterest revenue####3,494######3,336####3,929 Net interest income####12,052##(b)####8,197####6,079 Total net revenue(a)####15,546######11,533####10,008 Provision for credit losses####1,970##(b)####1,268####(947) Noninterest expense############## Compensation expense####2,760##(b)####2,296####1,973 Noncompensation expense####2,618######2,423####2,068 Total noninterest expense####5,378######4,719####4,041 Income before income tax expense####8,198######5,546####6,914 Income tax expense####2,055######1,333####1,668 Net income##$##6,143####$##4,213##$##5,246


JPM COMMERCIAL BANKING

(a)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $382 million, $322 million and $330 million for the years ended December 31, 2023, 2022 and 2021, respectively.


JPM COMMERCIAL BANKING

(b)Includes First Republic. Refer to page 67 for additional information.


JPM 2023 compared with 2022

Net income was $6.1 billion, up 46%.


JPM 2023 compared with 2022

Net revenue was $15.5 billion, up 35%.


JPM 2023 compared with 2022

Net interest income was $12.1 billion, up 47%, driven by: •deposit margin expansion on higher rates, partially offset by lower average deposits, and •higher average loans, including the impact from First Republic.


JPM 2023 compared with 2022

Noninterest revenue was $3.5 billion, up 5%, driven by: •higher lending-related revenue predominantly driven by the amortization of the purchase discount on certain acquired lending-related commitments associated with First Republic, •net markups on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio, compared with net markdowns in the prior year, and •higher investment banking revenue and card income,


JPM predominantly offset by

•lower deposit-related fees due to the higher level of client credits that reduce such fees, and •the absence of a gain on an equity-method investment received in partial satisfaction of a loan.


JPM predominantly offset by

Noninterest expense was $5.4 billion, up 14%, driven by higher compensation expense, reflecting an increase in employees including front office and technology, as well as higher volume-related expense, including the impact of new client acquisitions.


JPM predominantly offset by

The provision for credit losses was $2.0 billion, reflecting: •a $1.0 billion net addition to the allowance for credit losses, driven by the net effect of changes in the Firm’s weighted average macroeconomic outlook, including a deterioration in the outlook for commercial real estate and net downgrade activity, partially offset by the impact of changes in the loan and lending-related commitment portfolios, •$608 million to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023; and •net charge-offs of $316 million, up $232 million, primarily driven by Real Estate, predominantly concentrated in Office.


JPM predominantly offset by

The provision in the prior year was $1.3 billion, reflecting a net addition to the allowance for credit losses.


JPM 78 JPMorgan Chase & Co./2023 Form 10-K

CB product revenue consists of the following: Lending includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit. Payments includes services that enable CB clients to manage payments globally across liquidity and account solutions, commerce solutions, clearing, trade and working capital. Investment banking includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from fixed income and equity markets products used by CB clients is also included. Other revenue primarily includes tax-equivalent adjustments generated from Community Development Banking and activity derived from principal transactions. ########Selected income statement data (continued)############## Year ended December 31, (in millions, except ratios)####2023##########2022######2021## Revenue by product###################### Lending##$####5,993####(d)##$####4,524##$####4,629 Payments(a)####8,250##########5,691######3,653## Investment banking(a)(b)####1,167##########1,064######1,611## Other####136##########254######115## Total net revenue##$####15,546######$####11,533##$####10,008 Investment Banking and Markets revenue, gross(c)##$####3,393######$####2,978##$####5,092 Revenue by client segment###################### Middle Market Banking##$####7,371####(e)##$####5,134##$####4,004 Corporate Client Banking####4,777##########3,918######3,508## Commercial Real Estate Banking####3,308######(e)####2,461######2,419## Other####90##########20######77## Total net revenue##$####15,546######$####11,533##$####10,008 Financial ratios###################### Return on equity####20##%########16##%####21##% Overhead ratio####35##########41######40##


(a)In the third quarter of 2023, certain revenue from CIB Markets products was reclassified from payments to investment banking. Prior-period amounts have been revised to conform with the current presentation.


(b)Includes CB’s share of revenue from Investment Banking and Markets' products sold to CB clients through the CIB which is reported in All other income.


(c)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 revenues related to fixed income and equity markets products. Refer to Business Segment Results on page 65 for a discussion of revenue sharing.


(d)Includes First Republic. Refer to page 67 for additional information.


(e)Middle Market Banking and Commercial Real Estate Banking included $216 million and $687 million, respectively, for the year ended December 31, 2023, associated with First Republic. ########Selected metrics###### As of or for the year ended December 31, (in millions, except employees)####2023######2022####2021 Selected balance sheet data (period-end)############## Total assets##$##300,325####$##257,106##$##230,776 Loans:############## Loans retained####277,663##(b)####233,879####206,220 Loans held-for-sale and loans at fair value####545######707####2,223 Total loans##$##278,208####$##234,586##$##208,443 Equity####30,000######25,000####24,000 Period-end loans by client segment############## Middle Market Banking(a)##$##78,043##(c)##$##72,625##$##61,159 Corporate Client Banking####56,132######53,840####45,315 Commercial Real Estate Banking####143,507##(c)####107,999####101,751 Other####526######122####218 Total loans(a)##$##278,208####$##234,586##$##208,443 Selected balance sheet data (average)############## Total assets##$##287,851####$##243,108##$##225,548 Loans:############## Loans retained####267,285##(d)####222,388####201,920 Loans held-for-sale and loans at fair value####1,060######1,350####3,122 Total loans##$##268,345####$##223,738##$##205,042 Deposits####267,758##(e)####294,180####301,343 Equity####29,507######25,000####24,000 Average loans by client segment############## Middle Market Banking##$##77,130##(f)##$##67,830##$##60,128 Corporate Client Banking####58,770######50,281####44,361 Commercial Real Estate Banking####132,114##(f)####105,459####100,331 Other####331######168####222 Total loans##$##268,345####$##223,738##$##205,042 Employees####17,867######14,687####12,902


(a)As of December 31, 2023, 2022 and 2021, total loans included $36 million, $132 million, and $1.2 billion of loans, respectively, under the PPP, of which $32 million, $123 million and $1.1 billion were in Middle Market Banking, respectively.


(c)As of December 31, 2023, included $5.9 billion and $32.6 billion for Middle Market Banking and Commercial Real Estate Banking, respectively, associated with First Republic.


(d)Average loans retained associated with First Republic were $26.8 billion for the year ended December 31, 2023.


(e)In the fourth quarter of 2023, certain deposits associated with First Republic were transferred from CCB. Refer to page 67 for additional information.


(f)Average Middle Market Banking and Commercial Real Estate Banking loans associated with First Republic were $4.2 billion and $22.5 billion, respectively, for the year ended December 31, 2023.


JPM JPMorgan Chase & Co./2023 Form 10-K 79

##Selected metrics############ As of or for the year ended December 31, (in millions, except ratios)####2023######2022####2021 Credit data and quality statistics############## Net charge-offs/(recoveries)##$##316####$##84##$##71 Nonperforming assets############## Nonaccrual loans:############## Nonaccrual loans retained(a)##$##809####$##766##$##740 Nonaccrual loans held-for-sale and loans at fair value####—######—####— Total nonaccrual loans##$##809####$##766##$##740 Assets acquired in loan satisfactions####54######—####17 Total nonperforming assets##$##863####$##766##$##757 Allowance for credit losses:############## Allowance for loan losses##$##5,005####$##3,324##$##2,219 Allowance for lending-related commitments####801######830####749 Total allowance for credit losses##$##5,806##(c)##$##4,154##$##2,968 Net charge-off/(recovery) rate(b)####0.12%######0.04%####0.04% Allowance for loan losses to period-end loans retained####1.80######1.42####1.08 Allowance for loan losses to nonaccrual loans retained(a)####619######434####300 Nonaccrual loans to period-end total loans####0.29######0.33####0.36


(a)Allowance for loan losses of $156 million, $153 million and $124 million was held against nonaccrual loans retained at December 31, 2023, 2022 and 2021, respectively.


(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.


(c)As of December 31, 2023, included a $729 million allowance for First Republic.


JPM ASSET & WEALTH MANAGEMENT

Asset & Wealth Management, with client assets of $5.0 trillion, is a global leader in investment and wealth management.   Asset Management  Offers multi-asset investment management solutions across equities, fixed income, alternatives and money market funds to institutional and retail investors providing for a broad range of clients’ investment needs.   Global Private Bank Provides retirement products and services, brokerage, custody, estate planning, lending, deposits and investment management to high net worth clients.   The majority of AWM’s client assets are in actively managed portfolios. ##Selected income statement data################## Year ended December 31, (in millions, except ratios)####2023########2022######2021## Revenue#################### Asset management fees##$##11,826######$##11,510####$##11,518## Commissions and other fees####697########662####$##815## All other income####1,037####(a)(b)####335######738## Noninterest revenue####13,560########12,507######13,071## Net interest income####6,267########5,241######3,886## Total net revenue####19,827########17,748######16,957## Provision for credit losses####159########128######(227)## Noninterest expense#################### Compensation expense####7,115########6,336######5,692## Noncompensation expense####5,665########5,493######5,227## Total noninterest expense####12,780########11,829######10,919## Income before income tax expense####6,888########5,791######6,265## Income tax expense####1,661########1,426######1,528## Net income##$##5,227######$##4,365####$##4,737## Revenue by line of business#################### Asset Management##$##9,129######$##8,818####$##9,246## Global Private Bank####10,698########8,930######7,711## Total net revenue##$##19,827######$##17,748####$##16,957## Financial ratios#################### Return on equity####31##%######25##%####33##% Overhead ratio####64########67######64## Pre-tax margin ratio:#################### Asset Management####31########30######35## Global Private Bank####38########35######39## Asset & Wealth Management####35########33######37##


JPM ASSET & WEALTH MANAGEMENT

(a)Includes the amortization of the purchase discount on certain acquired lending-related commitments associated with First Republic. The discount is deferred in other liabilities and recognized on a straight-line basis over the commitment period and was largely recognized in the current year as the commitments are generally short term. Refer to Note 34 for additional information.


JPM ASSET & WEALTH MANAGEMENT

(b)Includes the gain on the original minority interest in CIFM upon the Firm’s acquisition of the remaining 51% interest in the entity.


JPM 2023 compared with 2022

Net income was $5.2 billion, up 20%.


JPM 2023 compared with 2022

Net revenue was $19.8 billion, up 12%. Net interest income was $6.3 billion, up 20%. Noninterest revenue was $13.6 billion, up 8%.


JPM 2023 compared with 2022

Revenue from Asset Management was $9.1 billion, up 4%, driven by: •a gain of $339 million on the original minority interest in CIFM upon the Firm's acquisition of the remaining 51% interest in the entity, and •higher asset management fees driven by strong net inflows largely offset by the net impact of foreign exchange rate movements, as well as the removal of most money market fund fee waivers in the prior year,


JPM largely offset by

•lower performance fees, and •lower NII due to higher funding costs.


JPM largely offset by

Revenue from Global Private Bank was $10.7 billion, up 20%, driven by: •higher net interest income on higher average loans associated with First Republic, and from deposit margin expansion on higher rates, largely offset by lower average deposits, and •higher noninterest revenue, predominantly driven by the amortization of the purchase discount on certain acquired lending-related commitments associated with First Republic, partially offset by net investment valuation losses.


JPM largely offset by

Noninterest expense was $12.8 billion, up 8%, predominantly driven by higher compensation, including continued growth in private banking advisor teams, revenue-related compensation and the impacts of closing the Global Shares and J.P. Morgan Asset Management China acquisitions.


JPM largely offset by

The provision for credit losses was $159 million, predominantly driven by a $146 million addition to the allowance for credit losses to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.


JPM largely offset by

The provision in the prior year was $128 million driven by a net addition to the allowance for credit losses.


JPM JPMorgan Chase & Co./2023 Form 10-K 81

Asset Management has two high-level measures of its overall fund performance. • 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. • 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. Selected metrics#################### As of or for the year ended December 31,  (in millions, except ranking data, ratios and employees)####2023########2022######2021## % of JPM mutual fund assets and ETFs rated as 4- or 5-star(a)####69##%######73##%####69##% % of JPM mutual fund assets and ETFs ranked in 1st or 2nd  quartile:(b)#################### 1 year####40########68######54## 3 years####67########76######73## 5 years####71########81######80## Selected balance sheet data (period-end)(c)#################### Total assets##$##245,512######$##232,037####$##234,425## Loans####227,929####(d)####214,006######218,271## Deposits####233,232####(e)####233,130######282,052## Equity####17,000########17,000######14,000## Selected balance sheet data (average)(c)#################### Total assets##$##240,222######$##232,438####$##217,187## Loans####220,487####(f)####215,582######198,487## Deposits####216,178####(e)####261,489######230,296## Equity####16,671########17,000######14,000## Employees####28,485########26,041######22,762## Number of Global Private Bank client advisors####3,515########3,137######2,738## Credit data and quality statistics(c)#################### Net charge-offs/(recoveries)##$##13######$##(7)####$##26## Nonaccrual loans####650########459######708## Allowance for credit losses:#################### Allowance for loan losses##$##633######$##494####$##365## Allowance for lending-related commitments####28########20######18## Total allowance for credit losses##$##661####(g)##$##514####$##383## Net charge-off/(recovery) rate####0.01##%######—##%####0.01##% Allowance for loan losses to period-end loans####0.28########0.23######0.17## Allowance for loan losses to nonaccrual loans####97########108######52## Nonaccrual loans to period-end loans####0.29########0.21######0.32##


(a)Represents the Morningstar Rating for all domiciled funds except for Japan domiciled funds which use Nomura. Includes only Asset Management retail active open-ended mutual funds and active ETFs that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds. This metric has been updated to include active ETFs, and prior period amounts have been revised to conform with the current presentation.


(b)Quartile ranking sourced from Morningstar, Lipper and Nomura based on country of domicile. Includes only Asset Management retail active open-ended mutual funds and active ETFs that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds. This metric has been updated to include active ETFs, and prior period numbers have been revised to conform with the current presentation.


(c)Loans, deposits and related credit data and quality statistics relate to the Global Private Bank business.


(d)Includes First Republic. Refer to page 67 for additional information.


(e)In the fourth quarter of 2023, certain deposits associated with First Republic were transferred from CCB. Refer to page 67 for additional information.


(f)Includes $8.7 billion for the full year 2023, associated with First Republic.


(g)Includes First Republic.


JPM 2023 compared with 2022

Assets under management were $3.4 trillion and client assets were $5.0 trillion, each up 24%, driven by continued net inflows, higher market levels, and the impact of the acquisition of Global Shares. ##Client assets########## December 31, (in billions)####2023####2022####2021 Assets by asset class############ Liquidity##$##926##$##654##$##708 Fixed income####751####638####693 Equity####868####670####779 Multi-asset####680####603####732 Alternatives####197####201####201 Total assets under management####3,422####2,766####3,113 Custody/brokerage/ administration/deposits####1,590####1,282####1,182 Total client assets(a)##$##5,012##$##4,048##$##4,295 Assets by client segment############ Private Banking##$##974##$##751##$##805 Global Institutional####1,488####1,252####1,430 Global Funds####960####763####878 Total assets under management##$##3,422##$##2,766##$##3,113 Private Banking##$##2,452##$##1,964##$##1,931 Global Institutional####1,594####1,314####1,479 Global Funds####966####770####885 Total client assets(a)##$##5,012##$##4,048##$##4,295


JPM 2023 compared with 2022

(a)Includes CCB client investment assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager. Client assets (continued)############ Year ended December 31, (in billions)####2023####2022####2021 Assets under management rollforward############ Beginning balance##$##2,766##$##3,113##$##2,716 Net asset flows:############ Liquidity####242####(55)####68 Fixed income####70####13####36 Equity####70####35####85 Multi-asset####1####(9)####17 Alternatives####(1)####8####26 Market/performance/other impacts####274####(339)####165 Ending balance, December 31##$##3,422##$##2,766##$##3,113 Client assets rollforward############ Beginning balance##$##4,048##$##4,295##$##3,652 Net asset flows####490####49####389 Market/performance/other impacts####474####(296)####254 Ending balance, December 31##$##5,012##$##4,048##$##4,295 ######International metrics###### Year ended December 31, (in billions, except where otherwise noted)####2023####2022####2021 Total net revenue (in millions)(a)############ Europe/Middle East/Africa##$##3,377##$##3,240##$##3,571 Asia-Pacific####1,876####1,836####2,017 Latin America/Caribbean####985####967####886 Total international net revenue####6,238####6,043####6,474 North America####13,589####11,705####10,483 Total net revenue##$##19,827##$##17,748##$##16,957 Assets under management############ Europe/Middle East/Africa##$##539##$##487##$##561 Asia-Pacific####263####218####254 Latin America/Caribbean####86####69####79 Total international assets under management####888####774####894 North America####2,534####1,992####2,219 Total assets under management##$##3,422##$##2,766##$##3,113 Client assets############ Europe/Middle East/Africa##$##740##$##610##$##687 Asia-Pacific####406####331####381 Latin America/Caribbean####232####189####195 Total international client assets####1,378####1,130####1,263 North America####3,634####2,918####3,032 Total client assets##$##5,012##$##4,048##$##4,295


JPM 2023 compared with 2022

(a)Regional revenue is based on the domicile of the client.


JPM CORPORATE

The Corporate segment consists of Treasury and Chief Investment Office (“CIO”) and Other Corporate. Treasury and CIO is predominantly responsible for measuring, monitoring, reporting and managing the Firm’s liquidity, funding, capital, structural interest rate and foreign exchange risks.  Other Corporate includes staff functions and expense that is centrally managed as well as certain Firm initiatives and activities not solely aligned to a specific LOB. The major Other Corporate functions include Real Estate, Technology, Legal, Corporate Finance, Human Resources, Internal Audit, Risk Management, Compliance, Control Management, Corporate Responsibility and various Other Corporate groups. ######Selected income statement and balance sheet data######## Year ended December 31, (in millions, except employees)####2023######2022####2021 Revenue############## Principal transactions##$##302####$##(227)##$##187 Investment securities gains/(losses)####(3,180)######(2,380)####(345) All other income####3,010##(c)####809####226 Noninterest revenue####132######(1,798)####68 Net interest income####7,906##(c)####1,878####(3,551) Total net revenue(a)####8,038######80####(3,483) Provision for credit losses####171######22####81 Noninterest expense####5,601##(c)(d)####1,034####1,802 Income/(loss) before income tax expense/(benefit)####2,266######(976)####(5,366) Income tax expense/(benefit)####(555)##(e)####(233)####(1,653) Net income/(loss)##$##2,821####$##(743)##$##(3,713) Total net revenue############## Treasury and CIO####6,072######(439)####(3,464) Other Corporate####1,966##(c)####519####(19) Total net revenue##$##8,038####$##80##$##(3,483) Net income/(loss)############## Treasury and CIO####4,206######(197)####(3,057) Other Corporate####(1,385)##(c)(d)####(546)####(656) Total net income/(loss)##$##2,821####$##(743)##$##(3,713) Total assets (period-end)##$##1,348,437####$##1,328,219##$##1,518,100 Loans (period-end)####1,924######2,181####1,770 Deposits(b)####21,826######14,203####396 Employees####47,530######44,196####38,952


JPM CORPORATE

(a)Included tax-equivalent adjustments, predominantly driven by tax-exempt income from municipal bonds, of $211 million, $235 million and $257 million for the years ended December 31, 2023, 2022 and 2021, respectively.


JPM CORPORATE

(b)Predominantly relates to the Firm's international consumer initiatives.


JPM CORPORATE

(c)Includes the impact of the First Republic acquisition. Refer to Notes 6 and 34 for additional information.


JPM CORPORATE

(d)Includes the FDIC special assessment. Refer to Note 6 for additional information.


JPM CORPORATE

(e)Income taxes associated with the First Republic acquisition are reflected in the estimated bargain purchase gain.


JPM 2023 compared with 2022

Net income was $2.8 billion, compared with a net loss of $743 million in the prior year.


JPM 2023 compared with 2022

Net revenue was $8.0 billion, compared with $80 million in the prior year, predominantly driven by higher net interest income due to higher rates, partially offset by the impact of lower Firmwide average deposit balances.


JPM 2023 compared with 2022

Noninterest revenue was $132 million, compared with a loss of $1.8 billion in the prior year, driven by: •the $2.8 billion estimated bargain purchase gain associated with the First Republic acquisition, •higher losses in the prior year on certain revenues associated with foreign exchange rate movements that are risk-managed by Treasury and CIO, and •the impact of higher short-term cash deployment activities as a result of the current interest rate environment,


JPM partially offset by

•higher net investment securities losses related to the sales of U.S. Treasuries and U.S. GSE and government agency MBS, associated with repositioning the investment securities portfolio, and •lower net gains related to certain other Corporate investments.


JPM partially offset by

The prior year included a gain on the sale of Visa B shares and proceeds from an insurance settlement.


JPM partially offset by

Noninterest expense was $5.6 billion, up $4.6 billion, predominantly driven by: •the $2.9 billion FDIC special assessment, •$1.0 billion associated with First Republic, predominantly driven by integration and restructuring costs as well as expenses recorded in the second quarter of 2023 with respect to individuals associated with First Republic who did not become employees of the Firm until July 2, 2023, •a greater benefit in the prior year on certain expenses associated with foreign exchange rate movements that are risk-managed by Treasury and CIO, •higher legal expenses, and •higher costs associated with the Firm's international consumer growth initiatives,


JPM partially offset by

•lower benefits-related and real estate expenses.


JPM partially offset by

The net impact of movements in foreign exchange rates associated with the foreign exchange risk that was transferred to Treasury and CIO on certain revenues and expenses was not material to net income. Refer to Foreign Exchange Risk on page 66 for additional information.


JPM partially offset by

Refer to Note 10 and Note 13 for additional information on the investment securities portfolio and the allowance for credit losses.


JPM 84 JPMorgan Chase & Co./2023 Form 10-K

The provision for credit losses was $171 million, reflecting a net addition to the allowance for credit losses related to a single name exposure, which was subsequently charged off upon the restructuring of a loan.


The current period income tax benefit was driven by: •the finalization of certain income tax regulations, other tax adjustments and tax benefits associated with tax audit settlements,


JPM partially offset by

•the impact from changes in the level and mix of income and expenses subject to U.S. federal, state and local taxes that also impacted the Firm's tax reserves.


JPM partially offset by

The income taxes associated with the First Republic acquisition are reflected in the estimated bargain purchase gain.


JPM partially offset by

The prior period income tax benefit was driven by benefits related to tax audit settlements as well as other tax adjustments, partially offset by a change in the level and mix of income and expenses subject to U.S. federal, state and local taxes that also impacted the Firm's tax reserves.


JPM partially offset by

Other Corporate also reflects the Firm's international consumer initiatives, which includes Chase U.K., the Firm's digital retail bank in the U.K.; Nutmeg, a digital wealth manager in the U.K.; and a 46% ownership stake in C6 Bank, a digital bank in Brazil.


JPM Treasury and CIO overview

Treasury and CIO is predominantly responsible for measuring, monitoring, reporting and managing the Firm’s liquidity, funding, capital, structural interest rate and foreign exchange risks. The risks managed by Treasury and CIO arise from the activities undertaken by the Firm’s four major reportable business segments to serve their respective client bases, which generate both on- and off-balance sheet assets and liabilities.


JPM Treasury and CIO overview

Treasury and CIO seeks to achieve the Firm’s asset-liability management objectives generally by investing in high-quality securities that are managed for the longer-term as part of the Firm’s investment securities portfolio. Treasury and CIO also uses derivatives to meet the Firm’s asset-liability management objectives. Refer to Note 5 for further information on derivatives. In addition, Treasury and CIO manages the Firm’s cash position primarily through deposits at central banks and investments in short-term instruments. Refer to Liquidity Risk Management on pages 102–109 for further information on liquidity and funding risk. Refer to Market Risk Management on pages 135–143 for information on interest rate and foreign exchange risks.


JPM Treasury and CIO overview

The investment securities portfolio predominantly consists of U.S. and non-U.S. government securities, U.S. GSE and government agency and nonagency mortgage-backed securities, collateralized loan obligations, obligations of U.S. states and municipalities and other ABS. At December 31, 2023, the Treasury and CIO investment securities portfolio, net of the allowance for credit losses, was $569.2 billion,


JPM Treasury and CIO overview

and the average credit rating of the securities comprising the portfolio was AA+ (based upon external ratings where available and, where not available, based primarily upon internal risk ratings). Refer to Note 10 for further information on the Firm’s investment securities portfolio and internal risk ratings. ########Selected income statement and balance sheet data###### As of or for the year ended December 31, (in millions)####2023######2022####2021 Investment securities losses##$##(3,180)####$##(2,380)##$##(345) Available-for-sale securities (average)##$##200,708####$##239,924##$##306,827 Held-to-maturity securities (average)(a)####402,010######412,180####285,086 Investment securities portfolio (average)##$##602,718####$##652,104##$##591,913 Available-for-sale securities (period-end)##$##199,354##(c)##$##203,981##$##306,352 Held-to-maturity securities (period–end)(a)####369,848######425,305####363,707 Investment securities portfolio, net of allowance for credit losses (period–end)(b)##$##569,202####$##629,286##$##670,059


JPM Treasury and CIO overview

(a)Effective January 1, 2023, the Firm adopted new hedge accounting guidance. As permitted by the guidance, the Firm elected to transfer $7.1 billion of HTM securities to AFS. During 2022 and 2021, the Firm transferred $78.3 billion and $104.5 billion of investment securities, respectively, from AFS to HTM for capital management purposes. Refer to Note 1 and Note 10 for additional information on the new hedge accounting guidance.


JPM Treasury and CIO overview

(b)As of December 31, 2023, 2022 and 2021, the allowance for credit losses on investment securities was $94 million, $67 million and $42 million, respectively.


JPM Treasury and CIO overview

(c)As of December 31, 2023, included $24.2 billion of AFS securities associated with First Republic. Refer to Note 34 for additional information.


JPM FIRMWIDE RISK MANAGEMENT

Risk is an inherent part of JPMorgan Chase’s business activities. When the Firm extends a consumer or wholesale loan, advises customers and clients on their investment decisions, makes markets in securities, or offers other products or services, the Firm takes on some degree of risk. The Firm’s overall objective is to manage its business, and the associated risks, in a manner that balances serving the interests of its clients, customers and investors, and protecting the safety and soundness of the Firm.


JPM FIRMWIDE RISK MANAGEMENT

The Firm believes that effective risk management requires, among other things: •Acceptance of responsibility, including identification and escalation of risks by all individuals within the Firm; •Ownership of risk identification, assessment, data and management within each of the LOBs and Corporate; and •A Firmwide risk governance and oversight structure.


JPM FIRMWIDE RISK MANAGEMENT

The Firm follows a disciplined and balanced compensation framework with strong internal governance and independent oversight by the Board of Directors (the “Board”). The impact of risk and control issues is carefully considered in the Firm’s performance evaluation and incentive compensation processes.


JPM Risk governance framework

The Firm’s risk governance framework involves understanding drivers of risks, types of risks, and impacts of risks.


JPM Risk governance framework

Drivers of risks are factors that cause a risk to exist. Drivers of risks include, but are not limited to, the economic environment, regulatory or government policy, competitor or market evolution, business decisions, process or judgment error, deliberate wrongdoing, dysfunctional markets, and natural disasters.


JPM Risk governance framework

Types of risks are categories by which risks manifest themselves. The Firm’s risks are generally categorized in the following four risk types: •Strategic risk is the risk to earnings, capital, liquidity, or reputation associated with poorly designed or failed business plans or an inadequate response to changes in the operating environment. •Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk, wholesale credit risk, and investment portfolio risk. •Market risk is the risk associated with the effect of changes in market factors, such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term. •Operational risk is the risk of an adverse outcome resulting from inadequate or failed internal processes or systems; human factors; or external events impacting the Firm’s processes or systems. Operational risk includes cybersecurity, compliance, conduct, legal, and estimations and model risk.


JPM Risk governance framework

Impacts of risks are consequences of risks, both quantitative and qualitative. There may be many consequences of risks manifesting, including quantitative impacts such as a reduction in earnings and capital, liquidity outflows, and fines or penalties, or qualitative impacts such as damage to the Firm’s reputation, loss of clients and customers, and regulatory and enforcement actions.


JPM Risk governance framework

The Firm’s risk governance framework is managed on a Firmwide basis. The Firm has an Independent Risk Management (“IRM”) function, which is comprised of Risk Management and Compliance. The Firm’s Chief Executive Officer (“CEO”) appoints, subject to approval by the Risk Committee of the Board of Directors (the “Board Risk Committee”), the Firm’s Chief Risk Officer (“CRO”) to lead the IRM function and maintain the risk governance framework of the Firm. The framework is subject to approval by the Board Risk Committee through its review and approval of the Risk Governance and Oversight Policy.


JPM Risk governance framework

The Firm’s CRO oversees and delegates authority to the Firmwide Risk Executives (“FREs”), the Chief Risk Officers of the LOBs and Corporate (“LOB CROs”), and the Firm’s Chief Compliance Officer (“CCO”), who, in turn, establish Risk Management and Compliance organizations, develop the Firm’s risk governance policies and standards, and define and oversee the implementation of the Firm’s risk governance framework. The LOB CROs oversee risks that arise in their LOBs and Corporate, while FREs oversee risks that span across the LOBs and Corporate, as well as functions and regions. Each area of the Firm giving rise to risk is expected to operate within the parameters identified by the IRM function, and within the risk and control standards established by its own management.


JPM Three lines of defense

The Firm’s “three lines of defense” are as follows:


JPM Three lines of defense

The first line of defense consists of each LOB, Treasury and CIO, and certain Other Corporate initiatives, including their aligned Operations, Technology and Control Management. The first line of defense owns the identification of risks within their respective organizations and the design and execution of controls to manage those risks. Responsibilities also include adherence to applicable laws, rules and regulations and implementation of the risk


JPM 86 JPMorgan Chase & Co./2023 Form 10-K

governance framework established by IRM, which may include policies, standards, limits, thresholds and controls.


The second line of defense is the IRM function, which is separate from the first line of defense and is responsible for independently measuring risk, as well as assessing and challenging the risk management practices of the first line of defense. IRM is also responsible for the identification of risks within its respective organization, adherence to applicable laws, rules and regulations and for the development and implementation of policies and standards with respect to its own processes.


The third line of defense is Internal Audit, an independent function that provides objective assessment of the adequacy and effectiveness of Firmwide processes, controls, governance and risk management. The Internal Audit function is headed by the General Auditor, who reports to the Audit Committee and administratively to the CEO.


In addition, there are other functions that contribute to the Firmwide control environment but are not considered part of a particular line of defense, including Finance, Human Resources and Legal. These other functions are responsible for the identification of risks within their respective organizations, adherence to applicable laws, rules and regulations and implementation of the risk governance framework established by IRM.


JPM Risk identification and ownership

The LOBs and Corporate own the identification of risks within their respective organizations, as well as the design and execution of controls, including IRM-specified controls, to manage those risks. To support this activity, the Firm has a risk identification framework designed to facilitate each LOB and Corporate’s responsibility to identify material risks inherent to the Firm’s businesses and operational activities, catalog them in a central repository and review material risks on a regular basis. The IRM function reviews and challenges the LOB and Corporate’s identified risks, maintains the central repository and provides the consolidated Firmwide results to the Firmwide Risk Committee (“FRC”) and the Board Risk Committee.


JPM Risk appetite

The Firm’s overall appetite for risk is governed by “Risk Appetite” frameworks for quantitative and qualitative risks. The Firm’s risk appetite is periodically set and approved by senior management (including the CEO and CRO) and approved by the Board Risk Committee. Quantitative and qualitative risks are assessed to monitor and measure the Firm’s capacity to take risk consistent with its stated risk appetite. Risk appetite results are reported to the Board Risk Committee.


JPM Risk governance and oversight structure

The independent status of the IRM function is supported by a risk governance and oversight structure that provides channels for the escalation of risks and issues to senior management, the FRC, and the Board of Directors, as appropriate.


The chart below illustrates the principal standing committees of the Board of Directors and key senior management-level committees in the Firm’s risk governance and oversight structure. In addition, there are other committees, forums and channels of escalation that support the oversight of risk that are not shown in the chart below or described in this Form 10-K.


The Firm’s Operating Committee, which consists of the Firm’s CEO, CRO, Chief Financial Officer (“CFO”), General Counsel, CEOs of the LOBs and other senior executives, is accountable to and may refer matters to the Firm’s Board of Directors. The Operating Committee and certain other members of senior management are responsible for escalating to the Board the information necessary to facilitate the Board’s exercise of its duties.


JPM Board oversight

The Firm’s Board of Directors actively oversees the business and affairs of the Firm. This includes monitoring the Firm’s financial performance and condition and reviewing the strategic objectives and plans of the Firm. The Board carries out a significant portion of its oversight responsibilities through its principal standing committees, each of which consists solely of independent members of the Board. The Board Risk Committee is the principal committee that oversees risk matters. The Audit Committee oversees the control environment, and the Compensation & Management Development Committee oversees compensation and other management-related matters. Each committee of the Board oversees reputation risks, conduct risks, and environmental, social and governance (“ESG”) matters within its scope of responsibility.


JPM Board oversight

The JPMorgan Chase Bank, N.A. Board of Directors is responsible for the oversight of management of the bank, which it discharges both acting directly and through the principal standing committees of the Firm’s Board of Directors. Risk and control oversight on behalf of JPMorgan


JPM Board oversight

Chase Bank N.A. is primarily the responsibility of the Board Risk Committee and the Audit Committee, respectively, and, with respect to compensation and other management-related matters, the Compensation & Management Development Committee.


JPM Board oversight

The Board Risk Committee assists the Board in its oversight of management’s responsibility to implement a global risk management framework reasonably designed to identify, assess and manage the Firm’s risks. The Board Risk Committee’s responsibilities include approval of applicable primary risk policies and review of certain associated frameworks, analysis and reporting established by management. Breaches in risk appetite and parameters, issues that may have a material adverse impact on the Firm, including capital and liquidity issues, and other significant risk-related matters are escalated to the Board Risk Committee, as appropriate.


JPM Board oversight

The Audit Committee assists the Board in its oversight of management’s responsibility to ensure that there is an effective system of controls reasonably designed to safeguard the Firm’s assets and income, ensure the integrity of the Firm’s financial statements, and maintain compliance with the Firm’s ethical standards, policies, plans and procedures, and with laws, rules and regulations. It also assists the Board in its oversight of the qualifications, independence and performance of the Firm’s independent registered public accounting firm, and of the performance of the Firm’s Internal Audit function.


JPM 88 JPMorgan Chase & Co./2023 Form 10-K

The Compensation & Management Development Committee (“CMDC”) assists the Board in its oversight of the Firm’s compensation principles and practices. The CMDC reviews and approves the Firm’s compensation and qualified benefits programs. The Committee reviews the performance of Operating Committee members against their goals, and approves their compensation awards. In addition, the CEO’s award is subject to ratification by the independent directors of the Board. The CMDC also reviews the development of and succession for key executives. As part of the Board’s role of reinforcing, demonstrating and communicating the “tone at the top,” the CMDC oversees the Firm’s culture, including reviewing updates from management regarding significant conduct issues and any related actions with respect to employees, including compensation actions.


The Public Responsibility Committee oversees and reviews the Firm's positions and practices on public responsibility matters such as community investment, fair lending, sustainability, consumer practices and other public policy issues that reflect the Firm's values and character and could impact the Firm's reputation among its stakeholders. The Committee also provides guidance on these matters to management and the Board, as appropriate.


The Corporate Governance & Nominating Committee exercises general oversight with respect to the governance of the Board of Directors. It reviews the qualifications of and recommends to the Board proposed nominees for election to the Board. The Committee evaluates and recommends to the Board corporate governance practices applicable to the Firm. It also reviews the framework for assessing the Board’s performance and self-evaluation.


JPM Management oversight

The Firm’s senior management-level committees that are primarily responsible for key risk-related functions include:


JPM Management oversight

The Firmwide Risk Committee (“FRC”) is the Firm’s highest management-level risk committee. It oversees the risks inherent in the Firm’s business and provides a forum for discussion of topics and issues that are raised or escalated by its members and other committees.


JPM Management oversight

The Firmwide Control Committee (“FCC”) is an escalation committee for senior management to review and discuss the Firmwide compliance and operational risk environment including identified issues, compliance and operational risk metrics and significant events that have been escalated.


JPM Management oversight

Line of Business and Regional Risk Committees are responsible for overseeing the governance, limits, and controls that have been established within the scope of their respective activities. These committees review the ways in which the particular LOB or the businesses operating in a particular region could be exposed to adverse outcomes, with a focus on identifying, accepting, escalating and/or requiring remediation of matters brought to these committees.


JPM Management oversight

Line of Business and Corporate Function Control Committees oversee the risk and control environment of their respective business or function, inclusive of Operational Risk, Compliance and Conduct Risks. As part of that mandate, they are responsible for reviewing indicators of elevated or emerging risks and other data that may impact the level of compliance and operational risk in a business or function, addressing key compliance and operational risk issues, with an emphasis on processes with control concerns and overseeing control remediation.


JPM Management oversight

The Asset and Liability Committee (“ALCO”) is responsible for overseeing the Firm’s asset and liability management (“ALM”), including the activities and frameworks supporting management of the balance sheet, liquidity risk, interest rate risk, and capital risk.


JPM Management oversight

The Firmwide Valuation Governance Forum (“VGF”) is composed of senior finance and risk executives and is responsible for overseeing the management of risks arising from valuation activities conducted across the Firm.


JPM Risk governance and oversight functions

The Firm manages its risk through risk governance and oversight functions. The scope of a particular function or business activity may include one or more drivers, types and/or impacts of risk. For example, Country Risk Management oversees country risk which may be a driver of risk or an aggregation of exposures that could give rise to multiple risk types such as credit or market risk.


The following sections discuss the risk governance and oversight functions that have been established to manage the risks inherent in the Firm’s business activities. Risk governance and oversight functions##Page Strategic Risk##90 Capital Risk##91-101 Liquidity Risk##102-109 Reputation Risk##110 Consumer Credit Risk##114-119 Wholesale Credit Risk##120-130 Investment Portfolio Risk##134 Market Risk##135-143 Country Risk##144-145 Climate Risk##146 Operational Risk##147-150 Compliance Risk##151 Conduct Risk##152 Legal Risk##153 Estimations and Model Risk##154


JPM STRATEGIC RISK MANAGEMENT

Strategic risk is the risk to earnings, capital, liquidity or reputation associated with poorly designed or failed business plans or an inadequate response to changes in the operating environment.


JPM Management and oversight

The Operating Committee, together with the senior leadership of each LOB and Corporate, are responsible for managing the Firm’s most significant strategic risks. IRM engages regularly in strategic business discussions and decision-making, including participation in relevant business reviews and senior management meetings, risk and control committees and other relevant governance forums, and review of acquisitions and new business initiatives. The Board of Directors oversees management’s strategic decisions, and the Board Risk Committee oversees IRM and the Firm’s risk governance framework.


JPM Management and oversight

In the process of developing business plans and strategic initiatives, LOB and Corporate senior management identify the associated risks that are incorporated into the Firmwide Risk Identification framework and their impact on risk appetite.


JPM Management and oversight

In addition, IRM conducts a qualitative assessment of the LOB and Corporate strategic initiatives to assess their impact on the risk profile of the Firm.


JPM Management and oversight

The Firm’s strategic planning process, which includes the development of the Firm’s strategic plan and other strategic initiatives, is one component of managing the Firm’s strategic risk. The strategic plan outlines the Firm’s strategic framework and initiatives, and includes components such as budget, risk appetite, capital, earnings and asset-liability management objectives. Guided by the Firm’s Business Principles, the Operating Committee and senior management teams in each LOB and Corporate review and update the strategic plan periodically, including evaluating the strategic framework and performance against prior-year initiatives, assessing the operating environment, refining existing strategies and developing new strategies.


JPM Management and oversight

The Firm’s strategic plan, together with IRM’s assessment, are provided to the Board as part of its review and approval of the Firm’s strategic plan, and the plan is also reflected in the Firm's budget.


JPM Management and oversight

The Firm’s balance sheet strategy, which focuses on risk-adjusted returns, strong capital and robust liquidity, is also a component in the management of strategic risk. Refer to Capital Risk Management on pages 91-101 for further information on capital risk. Refer to Liquidity Risk Management on pages 102–109 for further information on liquidity risk. Refer to Reputation Risk Management on page 110 for further information on reputation risk.


JPM CAPITAL RISK MANAGEMENT

Capital risk is the risk that the Firm has an insufficient level or composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions.


JPM CAPITAL RISK MANAGEMENT

A strong capital position is essential to the Firm’s business strategy and competitive position. Maintaining a strong balance sheet to manage through economic volatility is a strategic imperative of the Firm’s Board of Directors, CEO and Operating Committee. The Firm’s “fortress balance sheet” philosophy focuses on risk-adjusted returns, strong capital and robust liquidity. The Firm’s capital risk management strategy focuses on maintaining long-term stability to enable the Firm to build and invest in market-leading businesses, including in highly stressed environments. Senior management considers the implications on the Firm’s capital prior to making significant decisions that could impact future business activities. In addition to considering the Firm’s earnings outlook, senior management evaluates all sources and uses of capital with a view to ensuring the Firm’s capital strength.


JPM Capital risk management

The Firm has a Capital Risk Management function whose primary objective is to provide independent oversight of capital risk across the Firm.


JPM Capital risk management

Capital Risk Management’s responsibilities include: •Defining, monitoring and reporting capital risk metrics; •Establishing, calibrating and monitoring capital risk limits and indicators, including capital risk appetite; •Developing processes to classify, monitor and report capital limit breaches; •Performing assessments of the Firm’s capital management activities, including changes made to the Contingency Capital Plan described below; and •Conducting assessments of the Firm's regulatory capital framework intended to ensure compliance with applicable regulatory capital rules.


JPM Capital management

Treasury and CIO is responsible for capital management.


JPM Capital management

The primary objectives of the Firm’s capital management are to: •Maintain sufficient capital in order to continue to build and invest in the Firm’s businesses through normal economic cycles and in stressed environments; •Retain flexibility to take advantage of future investment opportunities; •Promote the Parent Company’s ability to serve as a source of strength to its subsidiaries; •Ensure the Firm operates above the minimum regulatory capital ratios as well as maintain “well-capitalized” status for the Firm and its principal insured depository institution (“IDI”) subsidiary, JPMorgan Chase Bank, N.A.


JPM at all times under applicable regulatory capital requirements;

•Meet capital distribution objectives; and •Maintain sufficient capital resources to operate throughout a resolution period in accordance with the Firm’s preferred resolution strategy.


The Firm addresses these objectives through: •Establishing internal minimum capital requirements and maintaining a strong capital governance framework. The internal minimum capital levels consider the Firm’s regulatory capital requirements as well as an internal assessment of capital adequacy, in normal economic cycles and in stress events; •Retaining flexibility in order to react to a range of potential events; and •Regularly monitoring the Firm’s capital position and following prescribed escalation protocols, both at the Firm and material legal entity levels.


JPM Governance

Committees responsible for overseeing the Firm’s capital management include the Capital Governance Committee, the Firmwide ALCO as well as regional ALCOs, and the CIO, Treasury and Corporate (“CTC”) Risk Committee. In addition, the Board Risk Committee periodically reviews the Firm’s capital risk tolerance. Refer to Firmwide Risk Management on pages 86–89 for additional discussion of the Firmwide ALCO and other risk-related committees.


JPM Comprehensive Capital Analysis and Review

The Federal Reserve requires the Firm, as a large Bank Holding Company (“BHC”), to submit at least annually a capital plan that has been reviewed and approved by the Board of Directors. The Federal Reserve uses Comprehensive Capital Analysis and Review (“CCAR”) and other stress testing processes to assess whether large BHCs, such as the Firm, have sufficient capital during periods of economic and financial stress, and have robust, forward-looking capital assessment and planning processes in place that address each BHC’s unique risks to enable it to absorb losses under certain stress scenarios. Through CCAR, the Federal Reserve evaluates each BHC’s capital adequacy and internal capital adequacy assessment processes (“ICAAP”), as well as its plans to make capital distributions, such as dividend payments or stock repurchases. The Federal Reserve uses results under the severely adverse scenario from its supervisory stress test to determine each firm’s Stress Capital Buffer (“SCB”) requirement for the coming year.


The Firm's current SCB requirement is 2.9%, and will remain in effect until September 30, 2024. The Firm’s Standardized CET1 capital ratio requirement, including regulatory buffers, was 11.4% as of December 31, 2023.


Refer to Capital actions on page 99 for information on actions taken by the Firm’s Board of Directors.


JPM Internal Capital Adequacy Assessment Process

Annually, the Firm prepares the ICAAP, which informs the Board of Directors of the ongoing assessment of the Firm’s processes for managing the sources and uses of capital as well as compliance with supervisory expectations for capital planning and capital adequacy. The Firm’s ICAAP integrates stress testing protocols with capital planning. The Firm’s Audit Committee is responsible for reviewing and approving the capital planning framework.


Stress testing assesses the potential impact of alternative economic and business scenarios on the Firm’s earnings and capital. Economic scenarios, and the parameters underlying those scenarios, are defined centrally and applied uniformly across the businesses. These scenarios are articulated in terms of macroeconomic factors, which are key drivers of business results; global market shocks, which generate short-term but severe trading losses; and idiosyncratic operational risk events. The scenarios are intended to capture and stress key vulnerabilities and idiosyncratic risks facing the Firm. In addition to CCAR and other periodic stress testing, management also considers tailored stress scenarios and sensitivity analyses, as necessary.


JPM Contingency Capital Plan

The Firm’s Contingency Capital Plan establishes the capital management framework for the Firm and specifies the principles underlying the Firm’s approach towards capital management in normal economic conditions and in stressed environments. The Contingency Capital Plan defines how the Firm calibrates its targeted capital levels and meets minimum capital requirements, monitors the ongoing appropriateness of planned capital distributions, and sets out the capital contingency actions that are expected to be taken or considered at various levels of capital depletion during a period of stress.


JPM Regulatory capital

The Federal Reserve establishes capital requirements, including well-capitalized standards, for the Firm as a consolidated financial holding company. The Office of the Comptroller of the Currency ("OCC") establishes similar minimum capital requirements and standards for the Firm’s principal IDI subsidiary, JPMorgan Chase Bank, N.A. The U.S. capital requirements generally follow the Capital Accord of the Basel Committee, as amended from time to time.


JPM Basel III Overview

The capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. BHCs and banks, including the Firm and JPMorgan Chase Bank, N.A. The minimum amount of regulatory capital that must be held by BHCs and banks is determined by calculating RWA, which are on-balance sheet assets and off-balance sheet exposures, weighted according to risk. Under the rules currently in effect, two comprehensive approaches are prescribed for calculating RWA: a standardized approach (“Basel III Standardized”), and an advanced approach (“Basel III Advanced”).


JPM Basel III Overview

For each of these risk-based capital ratios, the capital adequacy of the Firm is evaluated against the lower of the Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements.