Business segments

The Firm is managed on a line of business basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset Management. In addition, there is a Corporate/Private Equity segment. The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by management. Results of these lines of business are presented on a managed basis. For a definition of managed basis, see Explanation and Reconciliation of the Firm’s use of non-GAAP financial measures, on pages 76–77 of this Annual Report. For a further discussion concerning JPMorgan Chase’s business segments, see Business Segment Results on pages 78–79 of this Annual Report.

Business segment changes

Commencing with the fourth quarter of 2012, the Firm’s business segments have been reorganized as follows:

Retail Financial Services and Card Services & Auto (“Card”) business segments were combined to form one business segment called Consumer & Community Banking (“CCB”), and Investment Bank and Treasury & Securities Services business segments were combined to form one business segment called Corporate & Investment Bank (“CIB”). Commercial Banking (“CB”) and Asset Management (“AM”) were not affected by the aforementioned changes. A technology function supporting online and mobile banking was transferred from Corporate/Private Equity to the CCB business segment. This transfer did not materially affect the results of either the CCB business segment or Corporate/Private Equity.

The business segment information that follows has been revised to reflect the business reorganization retroactive to January 1, 2010.

The following is a description of each of the Firm’s business segments, and the products and services they provide to their respective client bases.

Consumer & Community Banking

CCB serves consumers and businesses through personal service at bank branches and through ATMs, online, mobile and telephone banking. CCB is organized into Consumer & Business Banking, Mortgage Banking (including Mortgage Production, Mortgage Servicing and Real Estate Portfolios) and Card. Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Mortgage Banking includes mortgage origination and servicing activities, as well as portfolios comprised of residential mortgages and home equity loans, including the PCI portfolio acquired in the Washington Mutual transaction. Card issues credit cards to consumers and small businesses, provides payment services to corporate and public sector clients through its commercial card products, offers payment processing services to merchants, and provides auto and student loan services.

Corporate & Investment Bank

CIB offers a broad suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, government and municipal entities. Within Banking, the CIB 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. Also included in Banking is Treasury Services, which includes transaction services, comprised primarily of cash management and liquidity solutions, and trade finance products. The Markets & Investor Services segment of the CIB is a global market-maker in cash securities and derivative instruments, and also offers sophisticated risk management solutions, prime brokerage, and research. Markets & Investor Services also includes the Securities Services business, a leading global custodian which holds, values, clears and services securities, cash and alternative investments for investors and broker-dealers, and manages depositary receipt programs globally.

Commercial Banking

CB delivers extensive industry knowledge, local expertise and dedicated service to U.S. and U.S. multinational clients, including corporations, municipalities, financial institutions and non-profit entities with annual revenue generally ranging from $20 million to $2 billion. CB provides financing to real estate investors and owners. Partnering with the Firm’s other businesses, CB provides comprehensive financial solutions, including lending, treasury services, investment banking and asset management to meet its clients’ domestic and international financial needs.

Asset Management

AM, with client assets of $2.1 trillion, is a global leader in investment and wealth management. AM clients include institutions, high-net-worth individuals and retail investors in every major market throughout the world. AM offers investment management across all major asset classes including equities, fixed income, alternatives and money market funds. AM also offers multi-asset investment management, providing solutions to a broad range of clients’ investment needs. For individual investors, AM also provides retirement products and services, brokerage and banking services including trust and estate, loans, mortgages and deposits. The majority of AM’s client assets are in actively managed portfolios.

Corporate/Private Equity

The Corporate/Private Equity segment comprises Private Equity, Treasury, Chief Investment Office (“CIO”), and Other Corporate, which includes corporate staff units and expense that is centrally managed. Treasury and CIO are predominantly responsible for measuring, monitoring, reporting and managing the Firm’s liquidity, funding, capital and structural interest rate and foreign exchange risks. The corporate staff units include Central Technology and Operations, Internal Audit, Executive, Finance, Human Resources, Legal & Compliance, Global Real Estate, General Services, Operational Control, Risk Management, and Corporate Responsibility & Public Policy. Other centrally managed expense includes the Firm’s occupancy and pension-related expense that are subject to allocation to the businesses.

Segment results

The following tables provide a summary of the Firm’s segment results for 2012, 2011 and 2010 on a managed basis. Total net revenue (noninterest revenue and net interest income) for each of the segments is presented on a fully taxable-equivalent (“FTE”) basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented on a basis comparable to taxable investments and securities; this non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense/(benefit).

Effective January 1, 2012, the Firm revised the capital allocated to each of its businesses, reflecting additional refinement of each segment’s Basel III Tier 1 common capital requirements.

Segment results and reconciliation^(a)



As of or the year ended December 31, (in millions, except ratios)	Consumer & Community Banking									Corporate & Investment Bank									Commercial Banking									Asset Management
	2012			2011			2010			2012			2011			2010			2012			2011			2010			2012			2011			2010
Noninterest revenue	$	20,795		$	15,306		$	15,513		$	23,104		$	22,523		$	22,889		$	2,283		$	2,195		$	2,200		$	7,847		$	7,895		$	7,485
Net interest income	29,150			30,381			33,414			11,222			11,461			10,588			4,542			4,223			3,840			2,099			1,648			1,499
Total net revenue	49,945			45,687			48,927			34,326			33,984			33,477			6,825			6,418			6,040			9,946			9,543			8,984
Provision for credit losses	3,774			7,620			17,489			(479		)	(285		)	(1,247		)	41			208			297			86			67			86
Noninterest expense	28,790			27,544			23,706			21,850			21,979			22,869			2,389			2,278			2,199			7,104			7,002			6,112
Income/(loss) before income tax expense/(benefit)	17,381			10,523			7,732			12,955			12,290			11,855			4,395			3,932			3,544			2,756			2,474			2,786
Income tax expense/(benefit)	6,770			4,321			3,154			4,549			4,297			4,137			1,749			1,565			1,460			1,053			882			1,076
Net income/(loss)	$	10,611		$	6,202		$	4,578		$	8,406		$	7,993		$	7,718		$	2,646		$	2,367		$	2,084		$	1,703		$	1,592		$	1,710
Average common equity	$	43,000		$	41,000		$	43,000		$	47,500		$	47,000		$	46,500		$	9,500		$	8,000		$	8,000		$	7,000		$	6,500		$	6,500
Total assets	463,608			483,307			508,775			876,107			845,095			870,631			181,502			158,040			142,646			108,999			86,242			68,997
Return on average common equity	25		%	15		%	11		%	18		%	17		%	17		%	28		%	30		%	26		%	24		%	25		%	26		%
Overhead ratio	58			60			48			64			65			68			35			35			36			71			73			68


(a)	Managed basis starts with the reported U.S. GAAP results and includes certain reclassifications as discussed below that do not have any impact on net income as reported by the lines of business or by the Firm as a whole.


(b)	Segment managed results reflect revenue on a FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These adjustments are eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results. FTE adjustments for the years ended December 31, 2012, 2011, and 2010, were as follows.



Year ended December 31, (in millions)	2012		2011		2010
Noninterest revenue	$	2,116	$	2,003	$	1,745
Net interest income	743		530		403
Income tax expense	2,859		2,533		2,148

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Corporate/Private Equity									Reconciling Items^(b)									Total
2012			2011			2010			2012			2011			2010			2012			2011			2010
$	208		$	3,629		$	5,351		$	(2,116	)	$	(2,003	)	$	(1,745	)	$	52,121		$	49,545		$	51,693
(1,360		)	506			2,063			(743		)	(530		)	(403		)	44,910			47,689			51,001
(1,152		)	4,135			7,414			(2,859		)	(2,533		)	(2,148		)	97,031			97,234			102,694
(37		)	(36		)	14			—			—			—			3,385			7,574			16,639
4,596			4,108			6,310			—			—			—			64,729			62,911			61,196
(5,711		)	63			1,090			(2,859		)	(2,533		)	(2,148		)	28,917			26,749			24,859
(3,629		)	(759		)	(190		)	(2,859		)	(2,533		)	(2,148		)	7,633			7,773			7,489
$	(2,082	)	$	822		$	1,280		$	—		$	—		$	—		$	21,284		$	18,976		$	17,370
$	77,352		$	70,766		$	57,520		$	—		$	—		$	—		$	184,352		$	173,266		$	161,520
728,925			693,108			526,556			NA			NA			NA			2,359,141			2,265,792			2,117,605
NM			NM			NM			NM			NM			NM			11		%	11		%	10		%
NM			NM			NM			NM			NM			NM			67			65			60