Credit risk concentrations

Concentrations of credit risk arise when a number of customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions.

JPMorgan Chase regularly monitors various segments of its credit portfolios to assess potential concentration risks and to obtain collateral when deemed necessary. Senior management is significantly involved in the credit approval and review process, and risk levels are adjusted as needed to reflect the Firm’s risk appetite.

In the Firm’s consumer portfolio, concentrations are evaluated primarily by product and by U.S. geographic region, with a key focus on trends and concentrations at the portfolio level, where potential risk concentrations can be remedied through changes in underwriting policies and portfolio guidelines. In the wholesale portfolio, risk concentrations are evaluated primarily by industry and monitored regularly on both an aggregate portfolio level and on an individual customer basis. The Firm’s wholesale exposure is managed through loan syndications and participations, loan sales, securitizations, credit derivatives, master netting agreements, and collateral and other risk-reduction techniques. For additional information on loans, see Note 14.

The Firm does not believe that its exposure to any particular loan product (e.g., option adjustable rate mortgages (“ARMs”)), industry segment (e.g., commercial real estate) or its exposure to residential real estate loans with high loan-to-value ratios results in a significant concentration of credit risk. Terms of loan products and collateral coverage are included in the Firm’s assessment when extending credit and establishing its allowance for loan losses.

The table below presents both on–balance sheet and off–balance sheet consumer and wholesale-related credit exposure by the Firm’s three credit portfolio segments as of December 31, 2014 and 2013.



	2014								2013
	Credit exposure		On-balance sheet				Off-balance sheet^(d)		Credit exposure		On-balance sheet				Off-balance sheet^(d)
December 31, (in millions)			Loans		Derivatives						Loans		Derivatives
Total consumer, excluding credit card	$	353,635	$	295,374	$	—	$	58,153	$	345,259	$	289,063	$	—	$	56,057
Total credit card	657,011		131,048		—		525,963		657,174		127,791		—		529,383
Total consumer	1,010,646		426,422		—		584,116		1,002,433		416,854		—		585,440
Wholesale-related
Real Estate	107,386		79,113		333		27,940		87,102		69,151		460		17,491
Banks & Finance Cos	68,203		24,244		22,057		21,902		66,881		25,482		18,888		22,511
Healthcare	57,707		13,793		4,630		39,284		46,934		14,383		2,203		30,348
Oil & Gas	48,315		15,616		1,872		30,827		45,910		13,319		3,202		29,389
Consumer Products	37,818		10,646		593		26,579		35,666		8,708		3,319		23,639
Asset Managers	36,374		8,043		9,569		18,762		34,145		9,099		715		24,331
State & Municipal Govt	31,858		7,593		4,079		20,186		33,506		5,656		7,175		20,675
Retail & Consumer Services	28,258		7,752		361		20,145		28,983		5,582		2,248		21,153
Utilities	28,060		4,843		2,317		20,900		25,068		7,504		273		17,291
Central Govt	21,081		1,081		11,819		8,181		21,403		4,426		1,392		15,585
Technology	20,977		4,727		1,341		14,909		21,049		1,754		9,998		9,297
Machinery & Equipment Mfg	20,573		6,537		553		13,483		19,078		5,969		476		12,633
Transportation	16,365		9,107		699		6,559		17,434		5,825		560		11,049
Business Services	16,201		4,867		456		10,878		14,601		4,497		594		9,510
Metals/Mining	15,911		5,628		601		9,682		13,975		6,845		621		6,509
All other^(a)	320,446		120,912		17,695		181,839		308,519		120,063		13,635		174,821
Subtotal	875,533		324,502		78,975		472,056		820,254		308,263		65,759		446,232
Loans held-for-sale and loans at fair value	6,412		6,412		—		—		13,301		13,301		—		—
Receivables from customers and other^(b)	28,972		—		—		—		26,744		—		—		—
Total wholesale-related	910,917		330,914		78,975		472,056		860,299		321,564		65,759		446,232
Total exposure^(c)	$	1,921,563	$	757,336	$	78,975	$	1,056,172	$	1,862,732	$	738,418	$	65,759	$	1,031,672


(a)	For more information on exposures to SPEs included within All other, see Note 16.


(b)	Primarily consists of margin loans to prime brokerage customers that are generally over-collateralized through a pledge of assets maintained in clients’ brokerage accounts and are subject to daily minimum collateral requirements. As a result of the Firm’s credit risk mitigation practices, the Firm did not hold any reserves for credit impairment on these receivables.


(c)	For further information regarding on–balance sheet credit concentrations by major product and/or geography, see Note 6 and Note 14. For information regarding concentrations of off–balance sheet lending-related financial instruments by major product, see Note 29.


(d)	Represents lending-related financial instruments.