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    JPM
    Earnings call· Mar 2026(Q1 FY26)

    JPMORGAN CHASE & CO JPM

    Apr 14, 2026 Source

    Executive summary

    JPMorgan Chase Q1 FY26 — Strong Performance Across Businesses, Basel III Concerns

    JPMorgan Chase delivered strong Q1 FY26 results, with robust revenue growth across its key segments, particularly in CIB and Asset & Wealth Management. The firm expressed significant concerns regarding the proposed Basel III Endgame and G-SIB surcharge reproposals, highlighting their disproportionate impact on JPM's capital requirements and potential disincentives for market-making activities. Management reiterated its commitment to serving clients and managing expenses holistically, while also discussing the early stages of AI adoption and the resilience of the U.S. consumer.

    Highlights

    5

    • Net income of $16.5 billion with an ROTC of 23%

    • Revenue up 10% year-on-year to $15.5 billion, driven by Markets, Asset Management, IB fees, and NII

    • CIB net income of $9 billion, with revenue up 19% year-on-year

    • IB fees up 28% year-on-year, driven by strong M&A and equity underwriting

    • Long-term net inflows of $54 billion in Asset & Wealth Management

    Concerns

    5

    • Expenses up 14% year-on-year to $26.9 billion, driven by compensation and brokerage expenses

    • Standardized CET1 ratio down 30 basis points quarter-on-quarter to 14.3%

    • RWA up $60 billion quarter-on-quarter, primarily due to markets business

    • Preliminary estimate of Basel III Endgame reproposal impact: CET1 capital increase of ~4% for JPM, worse than Fed's aggregate estimate of 5% reduction for large banks

    • G-SIB surcharge expected to increase by $20 billion by 2028, reaching 5.2% requirement

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 NII ex markets
    about $95 billion
    high materiality
    High
    Full-year 2026 Total NII
    approximately $103 billion
    high materiality
    High
    Full-year 2026 Adjusted Expense
    about $105 billion
    high materiality
    High
    Full-year 2026 Card Net Charge-Off Rate
    approximately 3.4%
    medium materiality
    High
    G-SIB Surcharge Requirement
    5.2%
    high materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Firm-wide
    Revenue growth primarily driven by higher markets revenue, higher asset management and investment banking fees, and higher NII, predominantly offset by the impact of lower rates.
    		$15.5 billion10%——
    Consumer & Community Banking (CCB)
    Revenue growth predominantly driven by higher card NII on higher revolving balances and higher operating lease income in auto. Client investment assets driven by market performance and healthy net inflows.
    Average deposits: up 2% year-on-year and quarter-on-quarterClient investment assets: up 18% year-on-yearHome Lending originations: $13.7 billionHome Lending originations growth: 46% year-on-year
    		$19.6 billion7%—$5 billion Net Income
    Corporate & Investment Bank (CIB)
    Revenue growth driven by higher revenues across businesses. IB fees driven by strong performance across M&A and equity underwriting, partially offset by lower debt underwriting. Markets performance strong across fixed income and equities.
    IB fees growth: 28% year-on-yearFixed Income Markets growth: 21% year-on-yearEquities Markets growth: 17% year-on-year
    		$23.4 billion19%—$9 billion Net Income
    Asset & Wealth Management (AWM)
    Revenue growth predominantly driven by growth in management fees on strong net inflows and higher average market levels. AUM and client assets driven by higher market levels and continued net inflows.
    Pretax margin: 35%Long-term net inflows: $54 billionAUM: $4.8 trillionAUM growth: 16% year-on-yearClient assets: $7.1 trillionClient assets growth: 18% year-on-year
    		$6.4 billion11%—$1.8 billion Net Income
    Corporate
    Reported net income and revenue for the Corporate segment.
    		$1.2 billion——$699 million Net Income

    Operational metrics

    23
    Net income
    $16.5 billion
    Q1 FY26

    Firm-wide net income.

    Adjusted EPS
    $5.94
    Q1 FY26

    Firm-wide adjusted EPS.

    Credit costs
    $2.5 billion
    Q1 FY26

    Total credit costs for the quarter.

    Net reserve build
    $191 million
    Q1 FY26

    Net reserve build for the quarter.

    Risk-Weighted Assets (RWA)
    $60 billionup QoQ
    Q1 FY26

    Increase in RWA quarter-on-quarter, primarily driven by the markets business reflecting higher client activity, seasonal effects, and higher energy prices.

    Basel III Endgame CET1 Capital Impact (JPM estimate)
    4%increase
    future

    JPMorgan Chase's preliminary estimate of the increase in CET1 capital under the proposed Basel III rules, contrasting with the Fed's aggregate estimate for large banks.

    Basel III Endgame CET1 Capital Impact (Fed estimate for large banks)
    5%reduction
    future

    The Fed's aggregate estimate for large banks under the proposed Basel III rules.

    G-SIB Capital Increase from STWF Methodology
    $22 billion
    future

    Additional G-SIB specific capital added by the proposed change in the short-term wholesale funding methodology, with JPM representing about $13 billion of this.

    Total G-SIB Capital Increase
    $20 billion
    by 2028

    Total increase in G-SIB capital based on current balance sheet, resulting from the proposed rules.

    G-SIB Surcharge (JPM)
    $109 billion
    future

    JPMorgan Chase's G-SIB surcharge under the proposed rules, which management finds hard to reconcile with the 2015 Fed G-SIB white paper principles.

    Consumer spend growth
    above last year's pace
    Q1 FY26

    Indicates continued resilience of consumers.

    Net new checking accounts
    over 450,000
    Q1 FY26

    Driver of long-term consumer deposit franchise growth.

    Private credit leverage lending market size
    $1.7 trillion
    current

    Market size for private credit leverage lending, compared to other debt markets.

    High-yield bonds market size
    $1.7 trillion
    current

    Market size for high-yield bonds.

    Syndicated leverage loans market size
    $1.7 trillion
    current

    Market size for syndicated leverage loans.

    Investment-grade debt market size
    $13 trillion
    current

    Market size for investment-grade debt.

    Mortgage debt market size
    $13 trillion
    current

    Market size for mortgage debt.

    Home Lending lease consumer
    $150 million
    Q1 FY26

    A lease consumer in home lending, attributed to an HPI upward revision.

    Trading capital
    $80 billion-$90 billion
    current

    Capital allocated for trading books.

    Daily trading volume
    $4 trillion
    daily

    Approximate daily volume of buying and selling activities.

    Total capital managed by investors globally
    $350 trillion
    current

    Total capital managed by investors around the world, indicating the scale of the market served by the trading business.

    Excess capital
    $40 billion
    current

    Amount of capital above current requirements, subject to change based on future regulations.

    Private credit exposure (JPM core)
    $50 billion
    Q1 FY26

    JPMorgan Chase's core private credit exposure, part of the broader NBFI exposure.

    Industry KPIs

    11
    MetricValueDetails
    Loans—
    Deposits—
    Rotce ROE23%%
    Cet1 ratio14.3%%
    Capital returns—
    Fee income lines—
    Allowance reserves—
    Net interest income$15.5 billionUSD
    Net charge offs npls3.4%%
    Total operating expenses$26.9 billionUSD
    Provision for credit losses$2.5 billionUSD

    Risks & headwinds

    4
    Basel III Endgame and G-SIB reproposal impactby 2028

    JPM CET1 capital increase of ~4%; G-SIB surcharge to 5.2% by 2028, adding $20 billion in capital; $109 billion G-SIB surcharge

    Mitigation: Advocating for coherent framework, averaging smaller buckets, GDP scaling, reweighting short-term wholesale funding to 20%; focused comments during common process; finding ways to serve clients while reducing G-SIB charge.

    Middle East geopolitical developmentsnear-term

    Potential impact on deal execution and timing

    Mitigation: Monitoring developments; pipeline remains resilient for now, but sentiment could shift if things derail.

    Credit cycle turn and weakening underwritingfuture (unspecified)

    Losses will be worse than people expect relative to the scenario; stress on leveraged companies if higher rates for longer

    Mitigation: Disciplined credit underwriting; turning down loans with unfavorable covenants or structures; willingness to reduce loan book if terms are irresponsible; preparing for recession and stagflation.

    Cyber risk, exacerbated by AIongoing

    AI creates additional vulnerabilities and makes cyber threats harder to manage

    Mitigation: Significant investment in protection, top experts, constant contact with government, continuous updates; strong hygiene practices (software testing, data protection, network security).

    What to watch in Q2 FY26

    5

    NII ex markets guidance

    next quarter
    Currentabout $95 billion
    TargetReaffirmation or revision of $95 billion

    Why it matters

    This metric is a key driver of profitability and its stability or revision will indicate management's updated view on rate sensitivity and balance sheet dynamics.

    In terms of the full year 2026 outlook, we continue to expect NII ex markets to be about $95 billion.

    Q&A highlights

    8

    How will the AI cash tool impact consumer deposit pressure and competition, and how do you see deposit competition evolving with similar smart tools?

    The AI cash tool is an early-stage experiment to help clients manage money, especially those with investments. Deposit competition is already intense, and this tool is part of optimizing client offerings. It's not expected to cause significant disruption immediately.

    “Jeff Bezos has always says, your margin is my opportunity. And I kind of agree with that. We're trying to look at the world and the point of view of the customer, what more can we do with them. And this is really early stages.”

    asked by Steven Chubak · answered by James Dimon

    2 min read6 chapters

    Detailed Narrative

    01

    Basel III Endgame and G-SIB Reproposal Concerns

    JPMorgan Chase expressed significant concerns regarding the reproposed Basel III Endgame rules, estimating a 4% increase in its CET1 capital, contrasting with the Fed's aggregate estimate of a 5% reduction for large banks. The firm highlighted that the proposed G-SIB surcharge would increase its requirement to 5.2% by 2028, a 70 basis point rise from the current 4.5%, leading to an additional $20 billion in G-SIB capital. Management criticized the methodology for being less risk-sensitive and impacting international competitiveness, particularly for market-making activities.

    02

    Consumer and Small Business Resilience

    Despite recent market volatility🌐 and higher gas prices, the U.S. consumer and small businesses remain resilient. Consumer spend growth continues above last year's pace, and average deposits were up 2% year-on-year and quarter-on-quarter. Management noted that while higher energy prices impact consumer spending, the effect is not yet overwhelming, and the strong labor market continues to underpin consumer credit health. Tax refunds are also contributing positively to consumer liquidity.

    03

    AI Cash Tool and Deposit Competition

    The firm discussed its new AI cash tool, acknowledging its potential to increase deposit competition and impact consumer deposit pressure. Management views this as an early-stage experiment aimed at making it easier for clients, particularly higher net worth individuals, to manage their money. They emphasized providing a comprehensive service basket, including ATMs, branches, and instant payment systems, to retain clients amidst intense competition for deposits.

    04

    Private Credit Market Dynamics

    JPMorgan Chase addressed the growth of the private credit market, noting its $1.7 trillion size. While acknowledging some weakening in underwriting across the broader credit landscape, the firm does not believe a potential credit cycle in private credit would be systemic. JPM's own private credit exposure is approximately $50 billion, structured with senior positions, well-diversified portfolios, conservative advance rates, and strong underwriting, providing comfort in its risk management.

    05

    Cyber Risk and AI Opportunities

    Cyber risk remains the firm's largest concern, with AI making it both harder and potentially offering new vulnerabilities. JPMorgan Chase invests heavily in protection, experts, and government collaboration. On the opportunity side, AI is seen as enhancing client services, reducing fraud, improving prospecting, and creating new adjacencies, though management cautioned against expecting AI to solely drive efficiency ratio improvements due to competitive dynamics.

    06

    Capital Allocation Strategy

    The firm currently holds approximately $40 billion in excess capital and prefers to deploy it by serving clients through business expansion, such as global banking, innovation economy initiatives, and opening new branches and payment systems. While buybacks are executed at fair market value, the preferred use of capital is to build wonderful businesses that intelligently use capital over time⏳, focusing on client needs and long-term growth opportunities, including large-scale infrastructure and M&A.

    AI-generated summary of the company’s earnings call. Not investment advice.