Uniform Bank Performance Report - Anderson School of Management

In 2008, that number grew to $5,088 million. The first two quarters of 2009 show service charges of
$3,454 million combined, which is almost equal to the service charge revenue for the whole year of
2007. The drastic increase from 2007 to mid‐2009 can be attributed to a hike in late fees for loan
payments and overdraft fees from depositor accounts. These fee increases seem to contradict the
bank’s stated commitment to provide assistance for individuals facing hardship amid the economic
crisis. However, this controversial means to offset losses in other areas of operation has been
implemented by many banks in recent times.
The acquisition of Chase Bank in 2000 provided JPMC with enormous credit card service capabilities,
now one of their most important revenue streams. Revenues from credit card services come from the
accrual of interest on outstanding debt. The first two quarters of 2009 show credit card revenue of
$3,556 million, which closely match the figures from 2007 and 2008. This is evidence that credit card
revenue is currently steady, but is not experiencing growth. Card issuance capabilities are also an asset
to the bank in that they provide extra incentive to utilize its other services, as well as acting as a valuable
marketing tool.
JPMorgan Chase also generates revenue through investment banking services such as the underwriting,
issuance, and commissioning of securities and derivatives. JPMC is a major underwriter, rivaling other
prominent underwriting firms such as Morgan Stanley and Goldman Sachs.
In 2008, the investment banking sector of JPMC underwent significant expansion. As equity markets
started to fail and stock prices plummeted, investment banking giant Bear Stearns failed, and was
acquired by JPMC. At the same time, demand for safer securities, such as bonds, was growing rapidly.
This provided an increase in investment banking revenue to JPMC through fees received for bond
underwriting.
The investment banking segment of JPMC now provides a large portion of the bank’s non‐interest
revenues. In 2007, JP Morgan received $6,635 million in investment banking fees. In 2008, the figure
was heavily reduced to $5,526 million. The economic growth of 2009 resulted in a promising start to the
year, with $3,492 million in investment banking revenue over the first two quarters. This solid
foundation may be attributed to increased trade frequency in the markets.