���������ֳ�

���������ֳ�-New York-16 May 2013: ���������ֳ� has affirmed JPMorgan Chase & Co.'s (JPM) long-term Issuer Default Rating (IDR) at 'A+' and short-term IDR at 'F1'. ���������ֳ� has also affirmed JPM's viability rating (VR) at 'a+', its support rating at '1', and its support rating floor (SRF) at 'A'. The Rating Outlook is Stable. A full list of ratings is provided at the end of this release.

The rating actions on JPM have been taken in conjunction with ���������ֳ�'s Global Trading and Universal Bank (GTUB) periodic review. ���������ֳ�'s outlook for the industry is stable. Positive rating drivers include improved liquidity, funding, capitalization and more streamlined businesses, all partly driven by regulation. Offsetting these positive drivers are substantial earnings pressure, regulatory uncertainty and heightened legal and operational risk.

KEY RATING DRIVERS - IDRs, VR AND SENIOR DEBT

JPM's ratings affirmation reflects its dominant domestic franchise and growing international franchise. The firm continues to maintain a leading position in its businesses, particularly in U.S. domestic commercial banking and investment banking (IB). JPM's product line diversity has contributed to consistent earnings generation in recent periods and superior operating performance throughout the crisis, relative to other global banks. Funding flexibility remains strong, despite cited weaknesses in risk management as a result of trading losses in the Chief Investment Office (CIO), and liquidity has strengthened, with continued progress toward achieving compliance with the liquidity coverage ratio (LCR) by year-end 2013.

The Stable Outlook reflects expectations for continued operating consistency, although ���������ֳ� believes earnings could decline from current levels as the interest rate environment remains challenging, regulatory costs grow, and credit metrics, particularly in card and the commercial bank, normalize from unsustainable lows. Still, offsets could be achieved from improved performance in mortgage banking and stronger operating efficiencies.

The rating also recognizes that the firm still has some work to do in addressing its risk governance weaknesses arising from the losses in the CIO. In addition to implementing recommendations from board and internal task force reviews, JPM entered into consent orders with its primary regulators in January 2013 for issues related to risk management, model governance, CIO, BSA/AML compliance, and other trading activities at the firm. Still, JPM has made progress enhancing its risk management and governance framework since CIO trading losses were revealed. ���������ֳ� believes the firm is committed to a best-in-class risk framework and will continue to address any unresolved issues.

Capital is adequate for the rating level, although JPM has historically been a more aggressive capital manager than some of its global peers. Estimated Basel III Tier I common ratio was 8.9% at 1Q13 and the bank plans to reach the 9.5% target by year-end, which ���������ֳ� believes is reasonable. Share repurchases resumed in 2013, with $2.6 billion of buybacks in 1Q13, and JPM received permission from regulators to repurchase an additional $6 billion of capital through 1Q14. However, the permission was conditional, given weaknesses cited in the capital planning process, and JPM is required to resubmit a capital plan to regulators by the end of 3Q13. Should regulators not be satisfied with remedial actions taken at that time, repurchase authority could be altered. ���������ֳ� would view an adverse result from the regulators negatively as it would signal failures in risk management and modeling, which has been an area of focus for the firm recently.

JPM's LCR ratio was approximately 83% at Dec. 31, 2012. Since then, high quality liquid assets, consisting of cash, governments, and agency mortgages, have grown $72 billion to $413 billion at March 31, 2013. The firm believes that through quarter-end it had closed the gap to full compliance with the LCR by about one-third, and it expects to be in full compliance by year-end. ���������ֳ� views the progress favorably and believes the firm manages liquidity well, though wholesale funding is a meaningful component which mainly supports its global broker/dealer operations. However, the company has a solid core deposit base, mainly in the U.S.

The mortgage business, particularly JPM's real estate portfolios continue to have relatively weak asset quality, although trends are improving. Mortgage production remained strong in 1Q13, but margins are declining and ���������ֳ� expects refinancing volume to slow in 2013. Mortgage servicing continues to be a drag on earnings, although costs have improved following the Independent Foreclosure Review Settlement in 4Q12. JPM expects servicing costs to decline further throughout the year, but ���������ֳ� believes it will be some time before the firm reaches its longer-term expense target of $325 million per quarter.

JPM's diverse business franchise has helped to offset weaknesses in mortgage. The credit card business continues to exceed ���������ֳ�'s expectations, with low credit losses and $500 million of reserve releases in 1Q13, but ���������ֳ� expects that there will likely be some deterioration in card asset quality in 2013 as the credit metrics are at unsustainable levels across the industry. The commercial banking, treasury & security services and the asset management businesses remain stable performers.

Like other global trading and universal banks, ���������ֳ� believes the IB creates greater volatility in JPM's earnings and serves as a rating constraint. While the agency recognizes the firm's leading position in IB, the business is vulnerable to cyclicality and more sensitive to market conditions than many of its other business lines. In addition, IB has historically been an important component of the firm's earnings.

Given the company's size and scale in many businesses, it, along with many other large financial firms, continues to be subject to various investigations and litigation. The most costly so far are mortgage related, including foreclosures and repurchases. LIBOR investigations are pending as well as several litigations stemming from the crisis and as a result of the CIO losses.

RATING DRIVERS AND SENSITIVITIES - IDRs, VR AND SENIOR DEBT
Going forward, ���������ֳ� believes JPM is going to be challenged to continue to deliver consistent earnings growth, particularly in light of the current regulatory environment. Higher capital charges and what remains difficult market conditions present a challenge for all GTUBs, which may be encouraged to seek more aggressive ways to generate profits that take advantage of regulatory loopholes. However, ���������ֳ� expects that JPM's strong global franchise, liquidity risk management, and product diversity mitigate some of these concerns.

Negative rating actions could result from material asset quality weakening which would pressure JPM's earnings and its ability to build capital, deterioration in liquidity levels, material and unexpected litigation losses, and/or failure to sufficiently address weaknesses noted in regulatory consent orders and the CCAR submission process in a timely fashion. Further, significant risk management or operational failures that result in material losses to the firm could also result in a negative rating action.

Upward rating momentum For JPM is believed to be limited for the foreseeable future given the risk and governance issues the firm is still addressing. Further its current rating level is among the highest of its peer group and relative to the global bank universe.

KEY RATING DRIVERS - SUPPORT RATING AND SRF

The affirmations of JPM's Support Rating and SRF are based on ���������ֳ�'s view that the probability of support from the U.S. authorities for JPM, if required, remains extremely high in the near term due to the bank's systemic importance.

RATING SENSITIVITIES - SUPPORT RATING AND SRF

The Support Rating and SRF are sensitive to a change in ���������ֳ�'s view of the ability or propensity of the U.S. sovereign to extend full support to the bank's senior creditors. There is a clear political intention to ultimately reduce the implicit state support for systemically important banks in Europe and the U.S., as demonstrated by a series of policy and regulatory initiatives aimed at curbing systemic risk posed by the banking industry. This might result in ���������ֳ� revising SRFs downward in the medium term, although the timing and degree of any change would depend on developments with respect to specific jurisdictions. Until now, senior creditors in major global banks have been supported in full, but resolution legislation is developing quickly and the implementation of creditor 'bail-in' is starting to make it look more feasible for taxpayers and creditors to share the burden of supporting large, complex banks.

KEY RATING DRIVERS & SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Subordinated debt and other hybrid capital issued by JPM and by various issuing vehicles are all notched down from JPM's or its bank subsidiaries' VRs in accordance with ���������ֳ�'s assessment of each instrument's respective nonperformance and relative Loss Severity risk profiles. Their ratings are primarily sensitive to any change in the VRs of JPM or its bank subsidiaries.

KEY RATING DRIVERS & SENSITIVITIES - HOLDING COMPANY

JPM's IDR and VR are equalized with those of its operating companies and banks, reflecting its role as the bank holding company, which is mandated in the U.S. to act as a source of strength for its bank subsidiaries. It has modest double leverage of 105.6% at year-end 2012.

KEY RATING DRIVERS & SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANY

The IDRs and VRs of JPM's bank subsidiaries benefit from the cross-guarantee mechanism in the U.S. under FIRREA and therefore IDRs and VRs are equalized across the group. JPMorgan Securities LLC (JPMS) is a wholly owned subsidiary that is the firm's U.S. broker dealer and is considered core to JPM's business. As a result its IDR is equalized with that of its parent JPM. Bear Stearns Companies, LLC and JPMorgan Clearing Corp. benefit from a parent guarantee and therefore their IDRs are equalized with JPM's. Collateralized Commercial Paper Co., LLC's short-term IDR benefits from JPMS's guarantee of the amounts payable by the repo seller, JPMCC, and as result its short-term IDR is equalized with that of JPMS. Collateralized Commercial Paper II Co., LLC's short-term IDR is based on the repo seller, JPMS's ST IDR.

JPM is a leading global trading and universal bank with $2.4 trillion in total assets and $6.5 billion of net income as of March 31, 2013.

���������ֳ� has affirmed the following ratings:

JPMorgan Chase & Co
--Long-term IDR at 'A+';
--Long-term senior debt at 'A+;
--Long-term subordinated debt at 'A';
--Preferred stock at 'BBB-';
--Short-term IDR at 'F1';
--Commercial paper at 'F1';
--Viability at 'a+';
--Market linked securities at 'A+emr';
--Support at '1';
--Support Floor at `A'.

JPMorgan Chase Bank N.A.
--Long-term deposits at 'AA-';
--Long-term IDR at 'A+';
--Long-term senior debt at 'A+';
--Long-term subordinated debt at 'A';
--Short-term IDR at 'F1';
--Short-term debt at 'F1';
--Short-term deposits at `F1+';
--Viability at 'a+';
--Market linked deposits at 'AA-emr';
--Market linked securities at 'A+emr';
--Support at '1';
--Support Floor at `A'.

Chase Bank USA, N.A.
--Long-term deposits at 'AA-';
--Long-term IDR at 'A+';
--Long-term senior debt at 'A+';
--Long-term subordinated debt at 'A';
--Short-term IDR at 'F1';
--Short-term debt at 'F1';
--Short-term deposits at `F1+';
--Viability at 'a+';
--Support at '1';
--Support Floor at `A'.

JPMorgan Bank & Trust Company, National Association
--Long-term deposits at 'AA-';
--Long-term IDR at 'A+';
--Short-term IDR at 'F1';
--Short-term deposits at `F1+';
--Viability at 'a+';
--Support at '1';
--Support Floor at `A'.

JPMorgan Chase Bank, Dearborn
--Long-term deposits at 'AA-';
--Long-term IDR at 'A+';
--Short-term IDR at 'F1';
--Short-term deposits at 'F1+';
--Viability at 'a+';
--Support at '1';
--Support Floor at `A'.

Bear Stearns Companies LLC
--Long-term IDR at 'A+';
--Long-term senior debt at 'A+';
--Long-term subordinated debt at 'A';
--Short-term IDR at 'F1';
--Market linked securities at 'A+emr'.

J.P. Morgan Securities LLC
--Long-term IDR at 'A+';
--Short-term IDR at 'F1'.

JPMorgan Clearing Corp (formerly Bear Stearns Securities Corp)
--Long-term IDR at 'A+';
--Short-term IDR at 'F1'.

Bank One Capital Trust III
Chase Capital II
Chase Capital III
Chase Capital VI
First Chicago NBD Capital I
JPMorgan Chase Capital XIII, XXI, and XXIII
--Preferred stock at 'BBB'.

Bank One Corp
--Long-term subordinated debt at 'A'.

JP Morgan & Co., Inc.
--Long-term senior debt at 'A+';
--Long-term subordinated debt at 'A'.

Morgan Guaranty Trust Co. of New York
--Long-term senior debt at 'A+'.

NBD Bank, N.A. (MI)
--Long-term subordinated at to 'A'.

Providian National Bank
--Long-term deposits at 'AA-'.

Washington Mutual Bank
--Long-term deposits at 'AA-'.

Collateralized Commercial Paper Co., LLC
--Short-term debt at 'F1'.

Collateralized Commercial Paper II Co., LLC
--Short-term debt at 'F1'.

Contact:

Primary Analyst
Joo-Yung Lee
Managing Director
+1-212-908-0560
���������ֳ�, Inc.
One State Street Plaza
New York, NY 10004

Secondary Analyst
Christopher Wolfe
Managing Director
+1-212-908-0771

Committee Chairperson
Gordon Scott
Managing Director
+44 20 3530 1075

Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: brian.bertsch@fitchratings.com.

Additional information is available at

Applicable Criteria and Related Research:
--'Master Global Financial Institutions Criteria' Aug. 15, 2012;
--'Securities Firms Criteria' Aug. 15, 2012;
--'Assessing and Rating Bank Subordinated and Hybrid Securities' Dec. 5, 2012;
--'Rating FI Subsidiaries and Holding Companies' Aug. 10, 2012.

Applicable Criteria and Related Research





Additional Disclosure