J.P. Morgan reports second quarter 2000 earnings

Business Wire, July 13, 2000

    Business Editors

      NEW YORK--(BUSINESS WIRE)--July 13, 2000--J.P. Morgan today
reported second quarter net income of $542 million, up from $504
million in the second quarter of 1999. Earnings per share were $2.90,
an increase of 15% from $2.52 a year ago. Return on common equity was
20% in the quarter compared with 18% in the second quarter of 1999.
      Net income for the first half of 2000 was $1.170 billion compared
with $1.104 billion in the same period a year ago. Earnings per share
were $6.27 compared with $5.53, an increase of 13%. Return on common
equity increased to 22% from 20% in the first half 1999.

    Highlights for the second quarter:

      -- Economic value added (EVA) was $258 million, an increase of 32%
from a year ago

      -- Revenues of $2.479 billion were up 13% in a challenging market
environment

      -- Momentum continued in Asset Management Services, Equities, and
Investment Banking and our proprietary activities produced excellent
results, offsetting the impact of depressed fixed income and currency
markets

      -- Expenses rose 17% as a result of performance-related
compensation and investment in Equities, Investment Banking, and
e-finance initiatives

      -- We repurchased $480 million of common stock (3.8 million
shares) during the quarter

      "Our diversified business mix allowed us to deliver strong results
in a tougher market environment," said Douglas A. Warner III,
chairman. "Areas of strategic growth - asset management, equities, and
investment banking - performed well, and we have a robust pipeline of
client activity. At the same time, we maintained our performance
discipline and returned significant capital to shareholders."

    Business segment results

      Asset Management Services revenues in the second quarter increased
19% to $409 million from a year ago. Revenues from private banking
clients grew significantly as a result of new client acquisition and
higher revenues from existing clients. Revenues from institutional
investment management and our equity investment in American Century
also rose. The segment's pre-tax margin expanded to 26% in the first
half of 2000 from 19% in the prior-year period. Assets under
management grew 13% from a year ago to approximately $372 billion at
June 30, 2000. This excludes $113 billion of assets under management
at American Century, in which we have a 45% interest.
      Investment Banking revenues were $426 million, up 4% from last
year's strong quarter. Record advisory revenues were driven by strong
activity with clients in Europe and in the technology sector. Debt
underwriting revenues were lower owing to reduced issuance in the
markets. For the first half of 2000, Thompson Financial Securities
Data Corporation ranked J.P. Morgan fifth in completed worldwide
mergers and acquisitions, with a market share of 20%, up from sixth
and 15% in the first half of 1999. In Europe, our share increased from
25% to 36%. We ranked sixth among U.S. lead equity underwriters with a
market share of 5.8%, compared with eighth and a market share of 4.4%
for the first half of 1999.
      Equities revenues increased 31% to $504 million over the prior
year on strength in both derivatives and cash securities. Revenues
from equity derivatives were well diversified across regions and
increased as a result of significant trading gains. Revenues from cash
equities rose materially on higher volumes and market share gains,
particularly in Europe.
      Interest Rate and Currency Markets revenues declined 31% to $384
million from the prior year quarter owing to lower trading results and
client activity across all products. Issuers and investors were
cautious throughout much of the quarter because of uncertainty about
interest rate policy.
      Credit Markets revenues were $348 million, 30% below the
prior-year quarter. The decline reflected lower underwriting results
in both high-grade and high-yield debt, as well as lower trading
results, particularly in Latin America. Clients' uncertainty about
rising interest rates and equity market volatility slowed issuance and
adversely affected our results. Despite these market conditions, the
overall quality of our credit portfolio remained high and its risk
stable.
      Equity Investments revenues were $145 million in the second
quarter, resulting primarily from gains realized on investments in the
financial services sector. The accumulated market appreciation of the
portfolio, excluding sales, declined by $65 million in the period. We
invested $107 million during the quarter, approximately one-half of
which was committed to the financial services and telecommunications
industries. Equity Investments revenues were $6 million in the second
quarter of 1999.
      Proprietary Positioning revenues were $283 million in the quarter,
up from $23 million a year ago. Total return - reported revenues and
the change in net unrealized value - was $277 million compared with $5
million a year ago. We achieved excellent results in several
market-neutral trading strategies. Risk levels were unchanged from the
first quarter and partially offset risks in other business segments.
      LabMorgan continued to expand its portfolio of e-finance ventures.
Since its inception in March, LabMorgan has received over 1,000
business ideas from outside and within the firm. Of these, 48 are in
various stages of validation and acceleration; in addition we
continued development of previously launched ventures.
      Significant initiatives announced during the quarter included:

      -- SynDirect Wireless, the first wireless communication platform
for bond issuers and investors;

      -- FXAll, a multi-dealer, on-line foreign exchange service and
Volbroker.com, the first real time global electronic trading service
for currency options;

      -- several fixed income initiatives in Europe and Asia: Coredeal,
a European inter-dealer platform for credit products; Bondclick, a
European government bond multi-dealer brokerage; and Asia Bond Portal,
a multi-dealer platform in Asia.

    Operating expenses

      Operating expenses were $1.660 billion compared with $1.417
billion in the prior-year quarter, up 17%. The increase was mostly due
to higher performance-driven compensation; expenses associated with
expanding our Equities and Investment Banking businesses, where we
hired approximately 100 experienced bankers, research analysts, and
other professionals; and ongoing investment in corporate e-finance
initiatives. Business productivity gains continued to help fund our
investments. The firm's efficiency ratio was 67% in the second quarter
of 2000; compensation expense, which represents two-thirds of our
total expenses, remained stable at 44% of revenues.

    Capital

      The firm purchased approximately $480 million of its common stock
(3.8 million shares) in the second quarter under its October 1999
authorization to repurchase up to $3 billion of common stock. The
purchases for the first half of 2000 totaled $1.1 billion (9.0 million
shares). As of June 30, 2000, approximately $2.5 billion of the
authorization had been utilized; we intend to use the remaining $500
million over the next three to nine months, subject to market
conditions, business considerations, and other factors. Excess capital
averaged $4.1 billion in the quarter compared with $3.7 billion for
first quarter of 2000.
      At June 30, 2000, under the Federal Reserve Board market risk
capital guidelines for the calculation of risk-based capital ratios,
J.P. Morgan's estimated tier 1 and total risk-based capital ratios
were 8.3% and 11.9%, respectively; the estimated leverage ratio was
4.4%. At March 31, 2000, J.P. Morgan's tier 1 and total risk-based
capital ratios were 8.3% and 12.0%, respectively, and the leverage
ratio was 4.5%.
      J.P. Morgan is a leading global financial firm that meets critical
financial needs for business enterprises, governments, and
individuals. The firm advises on corporate strategy and structure,
raises capital, makes markets in financial instruments, and manages
investment assets. Morgan also commits its own capital to promising
enterprises and invests and trades to capture market opportunities.

      This release may contain forward-looking statements. Our
statements, which reflect management's beliefs and expectations, are
subject to risks and uncertainties that may cause actual results to
differ materially from these statements. For a discussion of the risks
and uncertainties, please refer to the J.P. Morgan & Co. Incorporated
1999 Annual Report.

      Management will host a conference call with investors at 9:15 a.m.
Eastern time on Thursday, July 13. A live audio webcast of the call
will be available on the Internet at
http://www.jpmorgan.com/ir/2q2000.html. A replay of the call will be
available until Tuesday, July 18.

      Attached are tables with our segment results; a financial summary;
interim consolidated financial statements, which are unaudited; and
asset quality tables. J.P. Morgan news releases, including quarterly
financial results and a historical financial summary, are available on
the Internet at www.jpmorgan.com.


Segment Results
J.P. Morgan & Co. Incorporated

      The following table presents our current management reporting
structure. Results have been restated for all periods, reflecting
recent organization changes. Principal changes include the combination
of our Credit Markets and Credit Portfolio segments into a single
Credit Markets segment. In addition, revenue and expense allocations
between Investment Banking and the other segments, primarily Equities
and Credit Markets, have been changed to reflect the new organization.
Our consolidated results were not impacted.


                              Second  Second   First     Six      Six
                             Quarter Quarter Quarter  Months   Months
                                2000    1999    2000    2000     1999

Investment Banking
Total revenues                  $426    $409    $452    $878     $736
Total expenses                   383     309     409     792      601
Pretax income                     43     100      43      86      135
Pretax EVA                        19      75      16      35       88
Average required economic
 capital                         631     563     639     635      523


Equities
Total revenues                   504     385     584   1,088      640
Total expenses                   297     192     261     558      378
Pretax income                    207     193     323     530      262
Pretax EVA                       162     152     281     443      190
Average required economic
 capital                         762     740     732     747      634


Interest Rate & Currency
 Markets
Total revenues                   384     560     489     873    1,209
Total expenses                   280     321     334     614      680
Pretax income                    104     239     155     259      529
Pretax EVA                        15     135      32      47      320
Average required economic
capital                        1,789   2,017   1,732   1,760    2,058


Credit Markets
Total revenues                   348     496     550     898    1,327
Total expenses                   164     215     262     426      480
Pretax income                    184     281     288     472      847
Pretax EVA                        76      94     160     236      474
Average required economic
 capital                       3,709   4,225   3,701   3,705    4,479


Equity Investments
Total revenues                   145       6     153     298       (8)
Total expenses                    26      13      45      71       27
Pretax income                    119      (7)    108     227      (35)
Pretax EVA                        35      (1)     78     113      (60)
Average required economic
 capital                       1,661   1,365   1,882   1,772    1,321


Proprietary Positioning
Total revenues                   283      23     188     471      150
Total expenses                    53      43      56     109       75
Pretax income                    230     (20)    132     362       75
Pretax EVA                       197     (96)    150     347     (189)
Average required economic
 capital                         489   1,234     496     492    2,415


Asset Management Services
Total revenues                   409     343     407     816      652
Total expenses                   300     268     303     603      525
Pretax income                    109      75     104     213      127
Pretax EVA                        87      56      83     170       91
Average required economic
 capital                         590     556     530     607      554

Corporate
Total revenues                   (20)    (31)     13      (7)     (24)
Total expenses                   157      56     185     342      218
Pretax income                   (177)    (87)   (172)   (349)    (242)
Pretax EVA                      (207)   (108)   (240)   (447)    (161)
Average required economic
 capital                      (1,273) (1,239) (1,198) (1,282)  (1,420)

Consolidated
Total revenues                 2,479   2,191   2,836   5,315    4,682
Total expenses                 1,660   1,417   1,855   3,515    2,984
Pretax income                    819     774     981   1,800    1,698
Pretax EVA                       384     307     560     944      753
Average required
 economic capital              8,358   9,461   8,514   8,436   10,564

                             Increase /      Increase /    Increase /
                             (Decrease)      (Decrease)     (Decrease)
                             2Q 2000 vs.    2Q 2000 vs.   YTD 2000 vs.
                             2Q 1999        1Q 2000          YTD 1999
Investment Banking
Total revenues                   $17            ($26)            $142
Total expenses                    74             (26)             191
Pretax income                    (57)              -              (49)
Pretax EVA                       (56)              3              (53)
Average required economic
 capital                          68              (8)             112


Equities
Total revenues                   119             (80)             448
Total expenses                   105              36              180
Pretax income                     14            (116)             268
Pretax EVA                        10            (119)             253
Average required economic
 capital                          22              30              113


Interest Rate & Currency
 Markets
Total revenues                  (176)           (105)            (336)
Total expenses                   (41)            (54)             (66)
Pretax income                   (135)            (51)            (270)
Pretax EVA                      (120)            (17)            (273)
Average required economic
capital                         (228)             57             (298)


Credit Markets
Total revenues                  (148)           (202)            (429)
Total expenses                   (51)            (98)             (54)
Pretax income                    (97)           (104)            (375)
Pretax EVA                       (18)            (84)            (238)
Average required economic
 capital                        (516)              8             (774)

Equity Investments
Total revenues                   139              (8)             306
Total expenses                    13             (19)              44
Pretax income                    126              11              262
Pretax EVA                        36             (43)             173
Average required economic
 capital                         296            (221)             451

Proprietary Positioning
Total revenues                   260              95              321
Total expenses                    10              (3)              34
Pretax income                    250              98              287
Pretax EVA                       293              47              536
Average required economic
 capital                        (745)             (7)          (1,923)


Asset Management Services
Total revenues                    66               2              164
Total expenses                    32              (3)              78
Pretax income                     34               5               86
Pretax EVA                        31               4               79
Average required economic
 capital                          34              60               53

Corporate
Total revenues                    11             (33)              17
Total expenses                   101             (28)             124
Pretax income                    (90)             (5)            (107)
Pretax EVA                       (99)             33             (286)
Average required economic
 capital                         (34)            (75)             138

Consolidated
Total revenues                   288            (357)             633
Total expenses                   243            (195)             531
Pretax income                     45            (162)             102
Pretax EVA                        77            (176)             191
Average required
 economic capital             (1,103)           (156)          (2,128)

      Notes to segment results table:

-- We define economic value added (EVA) as operating income, adjusted
   to reflect certain segments on a total return basis, less preferred
   stock dividends and a charge for the cost of equity capital. The
   firm's cost of equity capital is currently estimated at 10.5%.

-- Corporate includes revenues and expenses related to Euroclear
   activities, as follows:

                    Second    Second     First
                   Quarter   Quarter   Quarter  Six Months  Six Months
In millions           2000      1999      2000        2000        1999

Total revenues         $81       $65       $76        $157        $130
Total expenses           4         3         9          13          12

Pretax income           77        62        67         144         118

Required versus available capital
J.P. Morgan & Co. Incorporated

                                  Second
                                 Quarter     Six Months
In millions                         2000           2000

Average common equity            $10,897        $10,764
Trust preferred securities         1,150          1,150
Fixed and adjustable preferred
 stock                               444            444
Other adjustments                    (62)           (56)

Total available capital           12,429         12,302

Total required economic capital
 of business segments              9,631          9,718
Corporate                          1,283          1,264
Diversification                   (2,556)        (2,546)

Total required economic capital    8,358          8,436

Excess available capital           4,071          3,866


Advisory and underwriting fees
J.P. Morgan & Co. Incorporated

                    Advisory  Underwriting revenue  Total advisory and
In millions             fees  and syndication fees   underwriting fees

Second Quarter 2000     $249          $219                 $468

Second Quarter 1999      183           274                  457

First Quarter 2000       236           307                  543

Six Months 2000          485           526                1,011

Six Months 1999          356           491                  847

Financial Summary
J.P. Morgan & Co. Incorporated

Dollars in millions, except share data
                                                              First
                                     Second Quarter          Quarter
                                   2000          1999          2000

Net Income                         $542          $504          $628
Economic value added
 (EVA) - after taxes                258           195           358

Per common share:
Net income
    Basic                         $3.10         $2.71         $3.62
    Diluted                        2.90          2.52          3.37
Dividends declared                 1.00          0.99          1.00
Book value                        60.76         57.60         59.82

Common shares issued
  and outstanding
  at period-end             159,869,519   175,949,606   162,502,847

Weighted-average number
  of common and dilutive
  potential common
  shares outstanding        183,730,614   196,539,342   183,589,900

Dividends declared
  on common stock                  $160          $175          $163
Dividends declared
  on preferred stock                 10             9             9

Annualized rate of return
  on average common
  stockholders' equity             19.6  %       18.0  %       23.4 %
As % of period-end total assets:
  Common equity                     4.2  %        4.1  %        3.8 %
  Total equity                      4.4           4.4           4.1

Regulatory capital ratios  (a)
  Tier 1 risk-based
   capital ratio                    8.3  %        8.4  %        8.3 %
  Total risk-based
   capital ratio                   11.9          12.5          12.0
  Leverage ratio                    4.4           4.5           4.5
Risk-adjusted assets  (a)       142,614       142,477       141,064

Average balances
  Debt investment
   securities (b)                $7,263       $29,512       $12,684
  Loans                          26,399        25,552        26,654
  Total interest-earning
   assets                       194,807       192,306       185,561
  Total assets                  271,250       266,145       260,458
  Total interest-bearing
   liabilities                  184,591       189,071       176,304
  Total liabilities             259,659       254,446       249,133
  Common stockholders'
   equity                        10,897        11,005        10,631
  Total stockholders'
   equity                        11,591        11,699        11,325

Net interest earnings
  before credit loss                394           445           470
  provisions
  (fully taxable basis)
Net yield on
  interest-earning assets          0.81  %       0.93  %       1.02 %

Employees at period-end          15,988        14,902        15,622


                                                  Six Months
                                              2000            1999
Net Income
Economic value added                         $1,170         $1,104
 (EVA) - after taxes                            616            480

Per common share:
Net income
    Basic                                     $6.66          $5.94
    Diluted                                    6.27           5.53
Dividends declared                             2.00           1.98
Book value

Common shares issued
  and outstanding
  at period-end

Weighted-average number
  of common and dilutive
  potential common
  shares outstanding                    183,660,257    196,461,040

Dividends declared
  on common stock                              $323           $350
Dividends declared
  on preferred stock                             19             18

Annualized rate of return
  on average common
  stockholders' equity                         21.5  %        20.1  %
As % of period-end total assets:
  Common equity
  Total equity

Regulatory capital ratios  (a)
  Tier 1 risk-based
   capital ratio
  Total risk-based
   capital ratio
  Leverage ratio
Risk-adjusted assets  (a)

Average balances
  Debt investment
   securities (b)                            $9,973        $31,660
  Loans                                      26,527         26,527
  Total interest-earning
   assets                                   190,184        194,761
  Total assets                              265,853        268,142
  Total interest-bearing
   liabilities                              180,447        189,740
  Total liabilities                         254,395        256,567
  Common stockholders'
   equity                                    10,764         10,881
  Total stockholders'
   equity                                    11,458         11,575

Net interest earnings
  before credit loss                            864            855
  provisions
  (fully taxable basis)
Net yield on
  interest-earning assets                      0.91  %        0.89  %

Employees at period-end

      (a) Regulatory capital ratios and risk-adjusted assets are
estimates at June 30, 2000.

      (b) Average debt investment securities are computed on historical
amortized cost, excluding the effects of SFAS No. 115 adjustments.

Consolidated statement of income
J.P. Morgan & Co. Incorporated

In millions, except share data

                                   Three months ended
                   June 30  June 30    Increase/   March 31  Increase/
                    2000      1999     (Decrease)    2000   (Decrease)

Net interest revenue
Interest revenue    $3,244   $2,713          $531    $3,031       $213
Interest expense     2,865    2,288           577     2,578        287

Net interest revenue   379      425           (46)      453       (74)

Reversal of provision
 for loan losses        (4)    (105)          101         -        (4)

Net interest revenue
 after loan loss
 provisions            383      530          (147)      453       (70)

Noninterest revenues
Trading revenue        906      803           103       950       (44)
Advisory and
 underwriting fees     468      457            11       543       (75)
Investment management
 fees                  303      260            43       276         27
Fees and commissions   232      191            41       284       (52)
Investment securities
 revenue / (loss)      128      (29)          157       157       (29)
Other revenue / (loss)  59(a)   (21)(a)        80       173(a)   (114)

Total noninterest
 revenues            2,096    1,661           435     2,383      (287)

Total revenues,
 net                 2,479    2,191           288     2,836      (357)

Operating expenses
Employee compensation
 and benefits        1,097      970           127     1,300      (203)
Net occupancy           81       80             1        82        (1)
Technology and
 communications        246      231            15       258       (12)
Other expenses         236      136           100       215         21

Total operating
 expenses            1,660    1,417           243     1,855      (195)

Income before income
 taxes                 819      774            45       981      (162)
Income taxes           277      270             7       353       (76)

Net income             542      504            38       628       (86)

Per common share
Net income:
     Basic           $3.10    $2.71         $0.39     $3.62    ($0.52)
     Diluted          2.90     2.52          0.38      3.37     (0.47)
Dividends declared    1.00     0.99          0.01      1.00         -

      (a) Includes a provision for credit losses on lending commitments
of $37 million, $35 million and $1 million for the three months ended
June 30, 2000 and 1999, and March 31, 2000, respectively.

Consolidated statement of income
J.P. Morgan & Co. Incorporated

In millions, except share data

                                         Six months ended

                               June 30         June 30      Increase/
                                  2000            1999     (Decrease)


Net interest revenue
Interest revenue                $6,275          $5,470           $805
Interest expense                 5,443           4,656            787

              -
Net interest revenue               832             814             18
Reversal of provision for loan
 losses                             (4)           (105)           101

Net interest revenue after loan
 loss provisions                   836             919            (83)


Noninterest revenues
Trading revenue                  1,856           1,937            (81)
Advisory and underwriting fees   1,011             847            164
Investment management fees         579             506             73
Fees and commissions               516             405            111
Investment securities revenue/
 (loss)                            285             (70)           355
Other revenue                      232(a)          138(a)          94

Total noninterest revenues       4,479           3,763            716

Total revenues, net              5,315           4,682            633

Operating expenses
Employee compensation and
 benefits                        2,397           2,066            331
Net occupancy                      163             162              1
Technology and communications      504             478             26
Other expenses                     451             278            173

Total operating expenses         3,515           2,984            531


Income before income taxes       1,800           1,698            102
Income taxes                       630             594             36

Net income                       1,170           1,104             66

Per common share
Net income:
     Basic                       $6.66           $5.94          $0.72
     Diluted                      6.27            5.53           0.74
Dividends declared                2.00            1.98           0.02

      (a) Includes a provision for credit losses on lending commitments
of $38 million and $35 million for the six months ended June 30, 2000
and 1999, respectively.


Consolidated balance sheet (preliminary)
J.P. Morgan & Co. Incorporated

In millions, except share data        June 30    March 31  December 31
                                         2000        2000        1999

Assets
Cash and due from banks              $  2,498    $  1,901     $  2,463
Interest-earning deposits with banks    4,705       5,198        2,345
Debt investment securities
 available-for-sale                     5,920       8,600       14,286
Equity investment securities            1,738       1,938        1,734
Trading account assets (including
 derivative receivables of $39,554
 at June 2000, $47,194 at March 2000
 and $43,658 at December 1999)        124,391     139,067      117,592
Securities purchased under
 agreements to resell ($41,910 at
 June 2000, $42,491 at March 2000
 and $34,470 at December 1999)
 and federal funds sold                43,010      42,916       35,970
Securities borrowed                    33,359      33,690       34,716
Loans, net of allowance for loan
 losses of $283 at June 2000,
 $290 at March 2000 and
 $281 at December 1999                 26,898      26,870       26,568
Accrued interest and
 accounts receivable                    6,654       6,979       10,119
Premises and equipment, net of
 accumulated depreciation of $1,361
 at June 2000, $1,325 at March 2000
 and $1,319 at December 1999            2,038       2,005        1,997
Other assets                           14,695      15,398       13,108

Total assets                          265,906     284,562      260,898


Liabilities
Deposits (including interest-bearing
 deposits of $43,873 at June 2000,
 $45,715 at March 2000 and $43,922
 at December 1999)                     46,511      47,334       45,319
Trading account liabilities
 (including derivative payables
 of $40,222 at June 2000,
 $46,235 at March 2000 and
 $44,976 at December 1999)             81,324      89,895       80,417
Securities sold under agreements
 to repurchase ($67,228 at June 2000,
 $73,811 at March 2000 and
 $58,950 at December 1999)
 and federal funds purchased           67,600      74,641       59,693
Commercial paper                        8,152       8,734       11,854
Other liabilities for borrowed money    9,709      10,140       10,258
Accounts payable and accrued expenses  10,313       9,977       10,621
Long-term debt not qualifying
 as risk-based capital                 18,025      20,126       19,048
Other liabilities, including
 allowance for credit losses of
 $163 at June 2000, $126 at March
 2000 and $125 at December 1999         6,383       5,883        5,897

                                      248,017     266,730      243,107

Liabilities qualifying as
 risk-based capital:
Long-term debt                          4,988       5,059        5,202
Company-obligated mandatorily
 redeemable preferred securities
 of subsidiaries                        1,150       1,150        1,150

Total liabilities                     254,155     272,939      249,459

Stockholders' equity
Preferred stock
 (authorized shares: 10,000,000)
   Adjustable rate cumulative
    preferred stock, $100 par value
    (issued and outstanding: 2,444,300)   244         244          244
   Variable cumulative preferred
    stock, $1,000 par value
    (issued and outstanding: 250,000)     250         250          250
   Fixed cumulative preferred stock,
    $500 par value
    (issued and outstanding: 400,000)     200         200          200
Common stock, $2.50 par value
 (authorized shares: 500,000,000;
 issued: 200,998,455 at June 2000,
 March 2000 and December 1999)            502         502          502
Capital surplus                         1,229       1,247        1,249
Common stock issuable under
 stock award plans                      2,152       1,951        2,002
Retained earnings                      11,717      11,354       10,908
Accumulated other comprehensive income:
   Net unrealized gains on investment
    securities, net of taxes               53         119           44
   Foreign currency translation,
    net of taxes                          (14)        (16)         (18)

                                       16,333      15,851       15,381

Less: treasury stock (41,128,936
 common shares and 15,000 preferred
 shares at June 2000, 38,495,608
 common shares at March 2000 and
 36,200,897 common shares at
 December 1999) at cost                 4,582       4,228        3,942

Total stockholders' equity             11,751      11,623       11,439

Total liabilities and
 stockholders' equity                 265,906     284,562      260,898

Credit Exposures (preliminary)
J.P. Morgan & Co. Incorporated

Credit exposure (preliminary)

                                                     June 30, 2000
   In billions                     Carrying value       Fair value

   Derivatives                              $39.6 (a)        $39.6
   Loans and lending commitments             26.7 (b)         27.0
   Total credit exposures   (c)              66.3             66.6


                                                 December 31, 1999
                                   Carrying value       Fair value

 Derivatives                                $43.7 (a)        $43.7
 Loans and lending commitments               26.4 (b)         26.5
 Total credit exposures   (c)                70.1             70.2


      (a) Carried at fair value on the balance sheet with changes in
fair value recorded in the income statement. Includes credit valuation
adjustment at June 30, 2000 and December 31, 1999, of $605 million and
$670 million, respectively.

      (b) Amount net of allowance for credit losses of $446 million as
of June 30, 2000 and $406 million as of December 31, 1999. Carrying
value excludes the notional value of lending commitments, which are
off-balance-sheet instruments.

      (c) Substantially all credit risk related to derivatives, loans,
and lending commitment exposures are managed by the Credit Markets
segment.

Credit exposure before and
 after collateral (preliminary)

                                    June 30, 2000   December 31, 1999
   In billions                     Gross Exposure      Gross Exposure

   Derivatives                              $39.6 (a)        $43.7 (a)
   Loans   (c)                               27.2             26.8

                                      After collateral and netting (b)
                                    June 30, 2000   December 31, 1999
                                     Net Exposure        Net Exposure


   Derivatives                              $34.0 (a)        $37.7 (a)

   Loans   (c)                               19.7             18.9


      (a) Includes the benefit of master netting agreements of $88.6
billion and $107.6 billion at June 30, 2000 and December 31, 1999,
respectively.

      (b) Collateral held consisting of highly rated liquid securities
(U.S. government securities) and cash was as follows: derivatives -
$5.6 billion (June 30, 2000) and $6 billion (December 31, 1999); and
loans - $7.5 billion (June 30, 2000) and $7.9 billion (December 31,
1999).

      (c) Before allowance for credit losses.

Counterparty credit
 quality (preliminary)

                                                         Derivatives
                                    June 30, 2000   December 31, 1999

   AAA, AA                                     53 %             52 %
   A                                           31               31
   BBB                                         10               12
   BB or below                                  6                5
                                              100              100

                                                  Loans and lending
                                                        commitments
                                    June 30, 2000  December 31, 1999

    AAA, AA                                    44 %             43 %
    A                                          27               29
    BBB                                        18               18
    BB or below                                11               10

                                              100              100

    Estimated percentages of credit exposures by counterparty credit
rating based on internal credit ratings. Ratings of AAA, AA, A and BBB
represent investment-grade ratings and are analogous to those of
public rating agencies in the United States. Credit exposures reflect
the benefits of master netting agreements, collateral, and purchased
credit protection (i.e. credit derivatives).

Equity investment securities
J.P. Morgan & Co. Incorporated

    The following table shows gross unrealized gains and losses, a
comparison of the cost, fair value and carrying value of marketable,
nonmarketable, and SBIC (small business investment company) securities
portfolios of J.P. Morgan consolidated. A substantial portion of these
are included in our Equity Investments segment.


In millions: June 30     Marketable    Nonmarketable   SBIC securities
Accounting               Fair value        Cost           Fair value
                       through equity                  through equity


Cost                       $353              $688             $300
Gross unrealized
 gains                      124                51              284
Gross unrealized
 losses                     (10)               (6)              (1)
Net unrealized
 gains                      114                45              283
Fair value                  467               733              583
Carrying value
 on balance sheet           467               688              583

Asset Quality

Impaired loans
J.P. Morgan & Co. Incorporated

                           June 30,      March 31,        June 30,
In millions                  2000          2000             1999

Impaired loans:
   Commercial and
     industrial              $122          $117 (a)         $38
   Other                       18            23              29

Total impaired loans          140           140              67

(a) The increase during the first quarter of 2000 primarily relates
to the addition of one European counterparty.


Allowances for credit losses
J.P. Morgan & Co. Incorporated

Allowance for loan losses

                     Second       Six Months      Second    Six Months
                     Quarter        Ended         Quarter     Ended
                                   June 30,                  June 30,
In millions           2000          2000           1999       1999

Beginning balance     $290          $281           $447       $470
(Reversal of
   provision for
   loan losses)         (4)           (4)          (105)      (105)
Recoveries               3            12              1          6
Charge-offs: (a)
  Commercial and
    industrial          -             -              (7)       (10)
  Other, primarily
    other financial
     institutions       (6)           (6)            (1)       (26)
Net (charge-offs) /
  recoveries            (3)            6             (7)       (30)
Ending balance         283           283            335        335

(a) Charge-offs include losses on loan sales of $5 million for the
three months ended June 30, 1999. Charge-offs include losses on loan
sales of $30 million for the six months ended June 30, 1999.


Components of the allowance for loan losses

                          June 30,         March 31,          June 30,
In millions                2000              2000               1999

Specific counterparty
  components in the U.S.    $ 9              $ 13               $ 6
Specific counterparty
  components outside
   the U.S.                  66                33                 8

Total specific
  counterparty               75                46                14
Expected loss               208               244               321

Total allowance             283               290               335


Allowance for credit losses on lending commitments(b)

                     Second      Six Months      Second     Six Months
                     Quarter        Ended        Quarter      Ended
                                   June 30,                  June 30,
In millions            2000          2000        1999          1999

Beginning balance      $126           $125       $125          $125
Provision for
  credit losses          37             38         35            35
Ending balance          163            163        160           160


Components of the allowance for credit losses on lending commitments(b)

                            June 30,       March 31,      June 30,
In millions                   2000           2000           1999

Specific counterparty
  components in the U.S.      $ 19           $ 19           $ 17
Specific counterparty
  components outside the U.S.    4              4              3
Total specific counterparty     23             23             20
Expected loss                  140            103            140
Total allowance                163            126            160

(b) Includes commitments to extend credit, standby letters of credit,
and guarantees.

    --30--mem/sds/fb/sw/rm/muj/lp/ny*

    CONTACT: J.P. Morgan, New York
             Press:
             Kristin C. Lemkau 212/648-9583
             Investor:
             Ann B. Patton 212/648-9446

    KEYWORD: NEW YORK
    INDUSTRY KEYWORD: BANKING EARNINGS