Dear Shareholders,
Across the globe, 2022 was another year of significant challenges: from a terrible war in Ukraine and growing geopolitical tensions — particularly with China — to a politically divided America. Almost all nations felt the effects of global economic uncertainty, including higher energy and food prices, mounting inflation rates and volatile markets, and, of course, COVID-19’s lingering impacts. While all these experiences and associated turmoil have serious ramifications on our company, colleagues, clients and the countries in which we do business, their consequences on the world at large — with the extreme suffering of the Ukrainian people and the potential restructuring of the global order — are far more important.
As these events unfold, America remains divided within its borders, and its global leadership role is being challenged outside of its borders. Nevertheless, this is the moment when we should put aside our differences and work with other Western nations to come together in defense of democracy and essential freedoms, including free enterprise. During other times of great crisis, we have seen America, in partnership with other countries around the globe, unite for a common cause. This is that moment again, when our country needs to work across public and private sectors to lead while improving American competitiveness — which also means re-establishing the American promise of providing equal access to opportunity for all. JPMorgan Chase, a company that historically has worked across borders and boundaries, will do its part to ensure the global economy is safe and secure.
In spite of the unsettling landscape, 2022 was somewhat surprisingly another strong year for JPMorgan Chase, with the firm generating record revenue for the fifth year in a row, as well as setting numerous records in each of our lines of business. We earned revenue in 2022 of $132.3 billion1 and net income of $37.7 billion, with return on tangible common equity (ROTCE) of 18%, reflecting strong underlying performance across our businesses. We also maintained our quarterly common dividend of $1.00 per share and continued to reinforce our fortress balance sheet. We grew market share in several of our businesses and continued to make significant investments in products, people and technology while exercising strict credit discipline. In total, we extended credit and raised capital of $2.4 trillion for our consumer and institutional clients around the world. I remain proud of our company’s resiliency and of what our hundreds of thousands of employees around the world have achieved, collectively and individually. Throughout these challenging past few years, we never stopped doing all the things we should be doing to serve our clients and our communities.
Adhering to our basic principles and strategies (see sidebar on Steadfast Principles on page 5) allows us to drive good organic growth and properly manage our capital (including dividends and stock buybacks), as we have consistently demonstrated for decades. Our performance results are shown in the charts on pages 6-12, which illustrate how we have grown our franchises, how we compare with our competitors and how we look at our fortress balance sheet. I invite you to peruse them at your leisure. In addition, I urge you to read the CEO letters in this Annual Report, which will give you more specific details about our businesses and our plans for the future.
As you know, we are champions of banking’s essential role in a community — its potential for bringing people together, for enabling companies and individuals to attain their goals, and for being a source of strength in difficult times. As I often remind our employees, the work we do matters and has impact. We help people and institutions finance and achieve their aspirations, lifting up individuals, homeowners, small businesses, larger corporations, schools, hospitals, cities and countries in all regions of the world.
Looking back on the past two+ decades — starting from my time as CEO of Bank One in 2000 — there is one common theme: our unwavering dedication to help clients, communities and countries throughout the world. It is clear that our financial discipline, constant investment in innovation and ongoing development of our people are what enabled us to achieve this consistency and commitment. In addition, across the firm, we uphold certain steadfast tenets that are worth repeating.
First, our work has very real human impact. While JPMorgan Chase stock is owned by large institutions, pension plans, mutual funds and directly by single investors, in almost all cases the ultimate beneficiaries are individuals in our communities. More than 100 million people in the United States own stock; many, in one way or another, own JPMorgan Chase stock. Frequently, these shareholders are veterans, teachers, police officers, firefighters, healthcare workers, retirees or those saving for a home, education or retirement. Often, our employees also bank these shareholders, as well as their families and their companies. Your management team goes to work every day recognizing the enormous responsibility that we have to all of our shareholders.
Second, shareholder value can be built only if you maintain a healthy and vibrant company, which means doing a good job of taking care of your customers, employees and communities. Conversely, how can you have a healthy company if you neglect any of these stakeholders? As we have learned over the past few years, there are myriad ways an institution can demonstrate its compassion for its employees and its communities while still upholding shareholder value.
Third, while we don’t run the company worrying about the stock price in the short run, in the long run we consider our stock price a measure of our progress over time. This progress is a function of continual investments in our people, systems and products, in good and bad times, to build our capabilities. These important investments will also drive our company’s future prospects and position it to grow and prosper for decades. Measured by stock performance, our progress is exceptional. For example, whether looking back 10 years or even farther to 2004, when the JPMorgan Chase/Bank One merger took place, we have significantly outperformed the Standard & Poor’s 500 Index and the Standard & Poor’s Financials Index.
Fourth, we are united behind basic principles and strategies (you can see the How We Do Business principles on our website) that have helped build this company and made it thrive — from maintaining a fortress balance sheet, constantly investing and nurturing talent to fully satisfying regulators, continually improving risk, governance and controls, and serving customers and clients while lifting up communities worldwide. This philosophy is embedded in our company culture and influences nearly every role in the firm.
Fifth, we strive to build enduring businesses, which rely on and benefit from one another, but we are not a conglomerate. This structure helps generate our superior returns. Nonetheless, despite our best efforts, the walls that protect this company are not particularly high — and we face extraordinary competition. I have written about this reality extensively in the past and cover it again in this letter. We recognize our strengths and vulnerabilities, and we play our hand as best we can.
Sixth, we operate with a very important silent partner — the U.S. government — noting as my friend Warren Buffett (Trades, Portfolio) points out that his company’s success is predicated upon the extraordinary conditions our country creates. He is right to say to his shareholders that when they see the American flag, they all should say thank you. We should, too. JPMorgan Chase is a healthy and thriving company, and we always want to give back and pay our fair share. We do pay our fair share — and we want it to be spent well and have the greatest impact. To give you an idea of where our taxes and fees go: In the last 10 years, we paid more than $43 billion in federal, state and local taxes in the United States and almost $19 billion in taxes outside of the United States. We also paid the Federal Deposit Insurance Corporation over $10 billion so that it has the resources to cover failure in the American banking sector. Our partner — the federal government — also imposes significant regulations upon us, and it is imperative that we meet all legal and regulatory requirements imposed on our company.
Seventh and finally, we know the foundation of our success rests with our people. They are the frontline, both individually and as teams, serving our customers and communities, building the technology, making the strategic decisions, managing the risks, determining our investments and driving innovation. However you view the world — its complexity, risks and opportunities — a company’s prosperity requires a great team of people with guts, brains, integrity, enormous capabilities and high standards of professional excellence to ensure its ongoing success.
Within this letter, I discuss the following:
WHY WE ARE PROUD OF JPMORGAN CHASE
- United by principles and purpose
- Our purpose
- Highlighting our diversity, equity and inclusion efforts
- The state of Ohio: How JPMorgan Chase drives community growth
UPDATE ON SPECIFIC ISSUES FACING OUR COMPANY
- Climate complexity and planning
- AI, data and our journey to the cloud
- Banking turmoil and regulatory goals
- Adjusting our strategy to the new regulatory reality (Basel III Endgame)
- Keeping an eye on all of our competitors
MANAGEMENT LESSONS
- Building true franchise value
- Learning from Investor Day
- Balancing a customer-centric approach with (excessive) risk
SOME COMMONSENSE PRINCIPLES FOR CORPORATE GOVERNANCE
- Promoting open communication and trust with the board
- Confronting succession planning
- Active engagement with asset managers
EVALUATING AND MANAGING THE ECONOMIC AND GEOPOLITICAL RISKS AHEAD
- The current economy: Pretty good but storm clouds ahead
- Potential trouble brewing from unprecedented fiscal spending, quantitative tightening and geopolitical tension
Sincerely,
Jamie Dimon,
Chairman and Chief Executive Officer
Read the original letter here.
