JPMorgan Chase & Co. Q1 Earnings Call Highlights

Key Points

• JPMorgan reported Q1 net income of $16.5 billion and EPS of $5.94$50.5 billion driven by higher markets revenue, asset management and investment banking fees, while expenses climbed 14% and credit costs were $2.5 billion.
• Management warned the proposed Basel III Endgame and G‑SIB reproposals would materially raise capital needs — estimating roughly a $20 billion increase in G‑SIB capital and a planned surcharge of 5.2% by 2028 — and criticized the proposals’ methodology as insufficiently risk‑sensitive.
• For full‑year 2026 the firm still expects NII ex‑markets of about $95 billion (total NII ~$103 billion), adjusted expenses of ~$105 billion, and said it currently measures around $40 billion of excess capital while prioritizing business growth over buybacks.

JPMorgan Chase & Co. NYSE: JPM opened its first-quarter 2026 earnings call by reporting results that were driven by stronger markets and fee income, while executives also spent considerable time discussing proposed U.S. capital rules and their potential impact on the firm’s requirements.

Quarterly results and balance sheet

Chief Financial Officer Jeremy Barnum said the firm reported net income of $16.5 billion and earnings per share of $5.94, producing a return on tangible common equity (ROTCE) of 23%.

Revenue of $50.5 billion increased 10% year over year, which Barnum attributed primarily to “higher markets revenue, higher asset management and investment banking fees, and higher NII driven by the impact of balance sheet growth,” partially offset by the impact of lower rates.

Expenses were $26.9 billion, up 14% year over year. Barnum said the increase was “largely driven by higher compensation, including higher revenue-related compensation and growth in front office employees,” along with higher brokerage expense and distribution fees. He also noted that expenses reflected “the absence of an FDIC special accrual release in the prior year.”

Credit costs were $2.5 billion, including net charge-offs of $2.3 billion and a net reserve build of $191 million.

On capital, Barnum said the standardized CET1 ratio ended the quarter at 14.3%, down 30 basis points from the prior quarter, as net income was more than offset by capital distributions and higher risk-weighted assets. Standardized RWA rose $60 billion, which he said was “primarily driven by the Markets business,” reflecting higher client activity, seasonal effects, and higher energy prices that increased market and credit risk RWAs ex lending.

Basel III Endgame and G-SIB reproposals

Barnum outlined concerns with recently released Basel III Endgame and G-SIB reproposals, focusing particularly on the G-SIB proposal. He said the company’s “preliminary estimate” showed its results “worse in each category” compared to aggregate estimates the Fed disclosed for Category 1 and 2 banks, including higher estimated RWA and a worse G-SIB outcome. Barnum also said that because JPMorgan’s CCAR losses are below the floor, “the Fed’s reduction is not going to apply to us.”

Under the proposed rules, Barnum said the firm’s CET1 capital would increase around 4%, while “the Fed’s estimate for large banks is about a 5% reduction.” He reiterated the firm’s view that regulators should calculate each component correctly and, if they want to add conservatism, “make that explicit rather than embedding it in methodological choices.”

On the G-SIB surcharge, Barnum said the proposed rule “looks quite high when placed in the historical context.” He said JPMorgan supported concepts in the notice of proposed rulemaking (including averaging, smaller buckets, GDP scaling, and reweighting short-term wholesale funding), but added that surcharges for “almost all of the G-SIB banks are scheduled to increase meaningfully over the next two years” due to system growth, despite “no change in real-world systemic risk,” in the firm’s view.

Barnum said changes to the short-term wholesale funding methodology add about $22 billion of G-SIB-specific capital, with about $13 billion tied to JPMorgan, and described the change as making the methodology “less risk-sensitive.” He said the firm needs to plan for a 5.2% surcharge in 2028, a 70-basis-point increase from the current 4.5% requirement. Combined with the Basel III Endgame proposal’s RWA increase, he said this results in “a total increase of about $20 billion of G-SIB capital based on our current balance sheet.”

Chief Executive Officer Jamie Dimon criticized elements of the framework, including the global market shock and operational risk capital constructs. On the global market shock, Dimon said it has “never been in the real world all these years,” and argued the trading-book capital implied by these scenarios is “completely out of whack with reality.” On operational risk, he called it “another crazy, obtuse one in 1,000 year thing,” arguing it “artificially create[s] risk-weighted assets which do not exist.”

Business segment performance

In Consumer & Community Banking (CCB), Barnum said net income was $5 billion and revenue of $19.6 billion increased 7% year over year, driven mainly by higher card net interest income from higher revolving balances and higher operating lease income in auto. He said consumers and small businesses “remain resilient,” with consumer spend growth continuing above last year’s pace. Average deposits rose 2% year over year and quarter over quarter, and client investment assets increased 18% year over year. Home lending originations of $13.7 billion rose 46% year over year, “predominantly driven by refi performance.”

The Corporate & Investment Bank (CIB) posted net income of $9 billion, while revenue of $23.4 billion rose 19% year over year. Investment banking fees were up 28%, driven by M&A and equity underwriting and partially offset by lower debt underwriting. Barnum said pipelines “remain healthy,” but added that “developments in the Middle East could have an impact on deal execution and timing.” In Markets, fixed income, currencies and commodities (FICC) income rose 21% year over year, while equities revenue increased 17% on higher client activity.

Asset & Wealth Management (AWM) reported net income of $1.8 billion and a pre-tax margin of 35%. Revenue of $6.4 billion rose 11% year over year on higher management fees and brokerage activity. Long-term net inflows were $54 billion, AUM was $4.8 trillion (up 16%), and client assets were $7.1 trillion (up 18%).

Corporate reported net income of $699 million on revenue of $1.2 billion.

Outlook: NII, expenses, and credit

For full-year 2026, Barnum said JPMorgan continues to expect net interest income (NII) ex markets of about $95 billion. He said total NII is now expected to be approximately $103 billion, reflecting Markets NII decreasing to about $8 billion “predominantly due to rates,” which he said is expected to be “primarily offset in NIR.”

The firm maintained its adjusted expense outlook of about $105 billion, and Barnum said the card net charge-off rate continues to be approximately 3.4%.

In Q&A, Barnum addressed reserve-setting and said the firm “did not change the weights this quarter” in its allowance scenario weighting. He said the weighted average unemployment rate embedded in the allowance decreased to 5.6% from 5.8%, creating a tailwind. Barnum also said the firm debated whether to add a downside skew given geopolitical developments, but concluded “the existing kind of conservative bias in the allowance was sufficient.”

Key themes in Q&A: deposits, private credit, AI, stablecoins, and capital allocation

Executives fielded several questions about deposits and competition. Dimon discussed an “AI cash tool” referenced in his annual letter, saying JPMorgan is trying to make it easier for customers to manage money across a broader bundle of services, acknowledging it “may squeeze some margin somewhere and create more competition somewhere.” Barnum said the tool “is kind of not even live yet,” is targeted to “a very small subset” of clients, and should be viewed as “an experiment right now.”

Dimon and Barnum also addressed private credit. Dimon reiterated he does not think it is systemic, citing relative market sizes and arguing banks are “fairly well protected” structurally. Barnum later sized exposure, saying that within about $160 billion of what the firm considers “core NBFI exposure,” there is “about $50” the firm would call private credit; he also described the leveraged-loan “back leverage type stuff” as “about $60 billion for us.” Dimon emphasized underwriting discipline, saying the firm will walk away if terms or covenants are unacceptable.

On AI and cyber risk, Dimon said cyber is the firm’s “largest risk,” adding that AI “has made it worse” and harder, and that JPMorgan spends heavily and stays in “constant contact with the government.” On AI productivity, Dimon cautioned against assuming AI will permanently boost efficiency ratios because in a competitive market benefits are likely to be passed to customers, while also saying AI creates opportunities in areas like fraud reduction, prospecting, and “Connected Commerce.”

On stablecoins and payments, Barnum said JPMorgan is “super excited to embrace this type of innovation,” pointing to payments modernization efforts through Kinexys and features like “programmable money.” He cautioned, however, that wholesale payments are already “incredibly efficient” and low margin, and stressed the importance of consistent regulation to avoid “a giant arbitrage backdoor.”

Finally, Dimon discussed capital deployment and said the firm measures around $40 billion of excess capital today, while emphasizing that the priority is building businesses and serving clients rather than buying back stock at any price. Barnum also acknowledged that the G-SIB surcharge “disproportionately accrues to Markets business,” and said it can affect the ability to grow certain market activities, particularly “low-risk density” client financing.

About JPMorgan Chase & Co. NYSE: JPM

JPMorgan Chase & Co NYSE: JPM is a diversified global financial services firm headquartered in New York City. The company provides a wide range of banking and financial products and services to consumers, small businesses, corporations, governments and institutional investors worldwide. Its operations span retail banking, commercial lending, investment banking, asset management, payments and card services, and treasury and securities services.

The firm's principal business activities are organized across several core lines: Consumer & Community Banking, which offers deposit accounts, mortgages, auto loans, credit cards and branch and digital banking under the Chase brand; Corporate & Investment Banking, which provides capital markets, advisory, underwriting, trading and risk management services; Commercial Banking, delivering lending, treasury and capital solutions to middle-market and corporate clients; and Asset & Wealth Management, which offers investment management, private banking and retirement services to institutions and high-net-worth individuals.

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