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Bigger Is Better

Deep Dive into the World's Most Valuable Bank

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Stock Review of the Month: JPM

In the ever-evolving landscape of global finance, one name has consistently stood tall as a pillar of stability. They are the lighthouse operator in the storm - J.P. Morgan.

While many other global banks are ahead in total asset ranking, no financial institution is more valuable (by market cap) than J.P. Morgan.

I’ll never forget turning on hearings during the great financial crisis as we tried to figure out how to pick up the pieces of a broken system. J.P. Morgan CEO Jamie Dimon was the go-to source of reason and still leads the company forward today.

Financial and economic turmoil has become the norm rather than the exception, and the institution with the most solid footing stands the test of time. None has done this better than J.P. Morgan.

This month’s deep dive will examine what makes J.P. Morgan tick.

  • Overview 👉 Business Unit Breakdown

  • By The Numbers 👉 Key Ratios & Metrics

  • Current Setup 👉 Most Recent Quarterly Report

Overview 👉 Business Unit Breakdown

J.P. Morgan Chase & Co (“J.P. Morgan”) can best be thought of as five distinct business units: 4 core operating units plus the corporate overhead structure:

Consumer & Community Banking (CCB)

This unit serves consumers and small businesses, offering various banking products and services, including checking and savings accounts, credit cards, mortgages, and small business loans. This is the largest division, representing 45% of net revenues and 44.8% of Net Income.

The key drivers of this business are average deposits, average loan growth, debit and credit card sales volumes, and active mobile customers.

Corporate & Investment Bank (CIB)

CIB provides various services to corporations, financial institutions, governments, and municipalities. This includes investment banking, treasury and securities, markets, and investor services. This is the second largest division, representing 29% of Net Revenue and 23.5% of Net Income.

The key drivers of this business are Global Investment Banking fees, fixed-income markets, and equity markets.

Commercial Banking (CB)

This unit serves mid-sized to large corporations, offering banking solutions such as cash management, lending, treasury services, and commercial real estate financing. This division represents 12.3% of Net Revenue and 14.7% of net income

The key drivers of this business are gross Investment banking and market revenue, average loans, and average deposits.

Asset & Wealth Management (AWM)

AWM provides investment management services to institutions and individuals. It manages assets across various asset classes, including equities, fixed income, real estate, and alternative investments. This division represents 9.9% of Net Revenue and 10.8% of net income.

The key drivers of this business are assets under management, average loans, and average deposits.

Corporate / Private Equity

The corporate segment typically includes the bank's corporate functions and overhead. This is where the bank manages its administrative and support functions. This division represents 3.8% of Net Revenue and 6.2% of net income.

By The Numbers 👉 Key Ratios & Metrics

You might have recognized a pattern above loans, deposits, and deposits sorted by different business lines. At the core of a bank’s function is facilitating capital allocation to efficient means of production for the overall economy.

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