Q1 2026 JPMorgan Chase & Co Earnings Call

April 14, 2026

Speaker #2: Good morning , ladies and gentlemen . Welcome to JP Morgan Chase . First quarter 2026 earnings call . This call is being recorded .

Operator 2: Good morning, ladies and gentlemen. Welcome to JPMorgan Chase's Q1 2026 Earnings Call. The presentation is available on JPMorgan Chase's website. Please refer to the disclaimer in the back concerning forward-looking statements. At this time, I would like to turn the call over to JPMorgan Chase's Chairman and CEO, Jamie Dimon, and Chief Financial Officer, Jeremy Barnum. Mr. Barnum, please go ahead.

Operator: Good morning, ladies and gentlemen. Welcome to JPMorgan Chase's Q1 2026 Earnings Call. The call is being recorded. The presentation is available on JPMorgan Chase's website. Please refer to the disclaimer in the back concerning forward-looking statements. At this time, I would like to turn the call over to JPMorgan Chase's Chairman and CEO, Jamie Dimon, and Chief Financial Officer, Jeremy Barnum. Mr. Barnum, please go ahead.

Speaker #2: Your line will be muted for the duration of the call . We will now go live to the presentation . The presentation is available on JP Morgan Chase website .

Speaker #2: Please refer to the disclaimer in the back . Concerning forward looking statements , please stand by at this time , I would like to turn the call over to JP Morgan , Chase's chairman and CEO , Jamie Dimon , and Chief Financial Officer Jeremy Barnum .

Speaker #2: Mr. Barnum, please go ahead.

Speaker #3: Thank you very much and good morning , everyone . This quarter , the firm reported net income of 16.5 billion and EPS of $5.94 with an ROTC of 23% revenue of 50.5 billion was up 10% year on year , primarily driven by higher markets .

Jeremy Barnum: Thank you very much, and good morning, everyone. This quarter, the firm reported net income of $16.5 billion and EPS of $5.94, with an ROTCE of 23%. Revenue of $50.5 billion was up 10% year-on-year, primarily driven by higher markets revenue, higher asset management and investment banking fees, and higher NII, driven by the impact of balance sheet growth, predominantly offset by the impact of lower rates. Expenses of $26.9 billion were up 14% year-on-year, largely driven by higher compensation, including higher revenue-related compensation and growth in front-office employees, as well as higher brokerage expense and distribution fees. The increase also reflects the absence of an FDIC special accrual release in the prior year. Credit costs of $2.5 billion, with net charge-offs of $2.3 billion and a net reserve build of $191 million.

Speaker #3: Revenue, higher asset management and investment banking fees, and higher NII, driven by the impact of balance sheet growth, were predominantly offset by the impact of lower rates.

Speaker #3: Expenses of $26.9 billion were up 14% year on year, largely driven by higher compensation, including higher revenue-related compensation and growth in salaried employees.

Speaker #3: As well as higher brokerage expense and distribution fees . The increase also reflects the absence of an FDIC special accrual release in the prior year , and credit costs of 2.5 billion , with net charge offs of 2.3 billion and a net reserve build of 191 million .

Speaker #3: And in terms of the balance sheet, we ended the quarter with a standardized CET1 ratio of 14.3%, down 30 basis points versus the prior quarter.

Jeremy Barnum: In terms of the balance sheet, we ended the quarter with a standardized CET1 ratio of 14.3%, down 30 basis points versus the prior quarter, as net income was more than offset by capital distributions and higher RWA. This quarter's standardized RWA is up $60 billion, primarily driven by the Markets business reflecting higher client activity, seasonal effects, and higher energy prices, which resulted in higher RWA across market risk and credit risk ex lending. Now, let me spend a few minutes on the recently released Basel III endgame and GSIB reproposals. I'll start by acknowledging that this has been a long journey, and getting it done across multiple regulators and applied to the full set of US banks is unquestionably a difficult task. With that said, we do have some concerns with elements of what's been put forward, primarily with the GSIB proposal.

Speaker #3: As net income was more than offset by capital distributions and higher RWA . This quarter's standardized RWA is up 60 billion , primarily driven by the market's business , reflecting higher client activity Seasonal effects and higher energy prices , which resulted in higher RWA across market risk and credit risk acts .

Speaker #3: Lending . Now , let me spend a few minutes on the recently released Basel three , endgame and Seb proposals I'll start by acknowledging that this has been a long journey and getting it done across multiple regulators and applied to the full set of US banks is unquestionably a difficult task With that said , we do have some concerns with elements of what's been put forward , primarily with the Gsib proposal on the left hand side , we show you our preliminary estimate of the impact on JPMorgan Chase , next to what the fed has disclosed for the category one and two banks in aggregate Our results are worse in each category .

Jeremy Barnum: On the left-hand side, we show you our preliminary estimate of the impact on JPMorgan Chase next to what the Fed has disclosed for the category one and two banks in aggregate. Our results are worse in each category. Estimated RWA is higher, GSIB is worse, and because our CCAR losses are below the floor, the Fed's reduction is not going to apply to us. The result is that under the proposed rules, our CET1 capital would increase around 4%, while the Fed's estimate for large banks is about a 5% reduction. Our longstanding position has been that the agencies should calculate each component of the capital requirements correctly, without regard to what that may mean for any specific firm or for the broader industry. To the extent regulators want to add conservatism, they should make that explicit rather than embedding it in methodological choices.

Speaker #3: Estimated RWA is higher, G-SIB is worse. And because our CAR losses are below the floor, the Fed's reduction is not going to apply to us.

Speaker #3: The result is that under the proposed rules, our CT1 capital would increase around 4%, while the Fed's estimate for large banks is about a 5% reduction.

Speaker #3: Our long standing position has been that the agencies should calculate each component of the capital requirements correctly , without regard to what that may mean for any specific firm or for the broader industry , and to the extent regulators want to add conservatism , they should make that explicit rather than embedding it in methodological choices Turning to Gsib on the right , the surcharge on the proposed rule looks quite high when placed in the historical context , as the chart clearly illustrates , as many of you know , we have been on the record for the better part of this last decade advocating for averaging smaller buckets , GDP scaling , and reweighting short term wholesale funding to 20% .

Jeremy Barnum: Turning to G-SIB on the right, the surcharge on the re-proposed rule looks quite high when placed in the historical context, as the chart clearly illustrates. As many of you know, we have been on the record for the better part of this last decade advocating for averaging, smaller buckets, GDP scaling, and re-weighting short-term wholesale funding to 20%. We were glad to see many of those concepts in the NPR. However, while we have every reason to believe that the Fed's published estimate of a 3.8% reduction in capital associated with the G-SIB NPR is accurate when defined narrowly, it's important to understand that under the current rule, the surcharges for almost all of the G-SIB banks are scheduled to increase meaningfully over the next two years simply as a result of recent growth in the system, despite, in our view, no change in real-world systemic risk.

Speaker #3: And we were glad to see many of those concepts in the NPR. However, while we have every reason to believe that the Fed's published estimate of a 3.8% reduction in capital associated with the GSIB NPR is accurate.

Speaker #3: When defined narrowly, it's important to understand that under the current rule, the surcharges for almost all of the G-SIB banks are scheduled to increase meaningfully over the next two years, simply as a result of recent growth in the system despite an—

Speaker #3: Our view no change in real world systemic risk . In addition to that background , increase the proposed change in the short term , wholesale funding methodology adds about $22 billion of Gsib specific capital , principally to the money center banks , of which we represent about 13 billion .

Jeremy Barnum: In addition to that background increase, the proposed change in the short-term wholesale funding methodology adds about $22 billion of GSIB-specific capital, principally to the money center banks, of which we represent about $13 billion, while, in the process, making the methodology less risk-sensitive and less consistent with the Fed's original rationale for including it. This could have been addressed by better adjusting for growth in the system, but it wasn't enough. The net result is that we need to plan for 5.2% in 2028, a 70 basis point increase from the current 4.5% requirement, which when combined with the RWA increase from the Basel III endgame NPR, results in a total increase of about $20 billion of GSIB capital based on our current balance sheet.

Speaker #3: While in the process, making the methodology less risk sensitive and less consistent with the Fed's original rationale for including it, this could have been addressed by better adjusting for growth in the system, but it wasn't enough.

Speaker #3: The net result is that we need to plan for 5.2% in 2028, a 70 basis point increase from the current 4.5% requirement, which, when combined with the RWA increase from the Basel III endgame.

Speaker #3: NPR results in a total increase of about $20 billion of capital. Based on our current balance sheet, this persistent miscalibration of the U.S. surcharge is obviously bad for international competitiveness, but more importantly, domestically.

Jeremy Barnum: This persistent miscalibration of the US surcharge is obviously bad for international competitiveness, but more importantly, domestically, this means that the cost of credit from JPMorgan Chase to US households and businesses is likely higher than it is from other domestic non-G-SIB banks. We recognize that we are larger and more systemically important than even large domestic peers. In the end, the question is, how much more should the cost be? It is very hard to reconcile the principles articulated in the 2015 Fed GSIB white paper with an outcome where JPMorgan Chase has $109 billion of GSIB surcharge. Obviously, the rules aren't final yet, and this is what the comment process is for. As Jamie wrote in his Chairman's letter, everyone wants to move on, so our comments will be very focused.

Speaker #3: This means that the cost of credit from JPMorgan Chase to US households and businesses is likely higher than it is from other domestic non-gcb banks .

Speaker #3: We recognize that we are larger and more systemically important than even large domestic peers, but in the end, the question is: how much more should the cost be?

Speaker #3: It is very hard to reconcile the principles articulated in the 2015 fed Gsib White paper with an outcome where JPMorgan Chase has $109 billion of Gsib surcharge Obviously , the rules aren't final yet , and this is what the common process is for .

Speaker #3: As Jamie wrote in the Chairman's letter, everyone wants to move on. So our comments will be very focused. But we feel strongly that the framework should be coherent, and the system would therefore be better off with these outstanding points addressed.

Jeremy Barnum: We feel strongly that the framework should be coherent and the system would therefore be better off with these outstanding points addressed. Now, moving to our businesses. CCB reported net income of $5 billion. Revenue of $19.6 billion was up 7% year-on-year, predominantly driven by higher card NII, largely on higher revolving balances, and higher operating lease income in auto. A few points to highlight. Notwithstanding the recent volatility in market and gas prices, based on our data, consumers and small businesses remain resilient, with consumer spend growth continuing above last year's pace. Average deposits were up 2% year-on-year and quarter-on-quarter, driven by account growth and moderating yield-seeking flows. Client investment assets were up 18% year-on-year, driven by market performance and healthy net inflows. In home lending, originations of $13.7 billion increased 46% year-on-year, predominantly driven by refi performance.

Speaker #3: Now , moving to our businesses , CCB reported net income of 5 billion . Revenue of 19.6 billion was up 7% year on year , predominantly driven by higher card NII , largely on higher revolving balances and higher operating lease income and auto .

Speaker #3: A few points to highlight . Notwithstanding the recent volatility in market and gas prices based on our data , consumers and small businesses remain resilient with consumer spend growth continuing above last year's pace Average deposits were up 2% year on year and quarter on quarter , driven by account growth and moderating yield seeking flows .

Speaker #3: Client investment assets were up 18% year on year , driven by market performance and healthy net inflows , and in home lending originations of 13.7 billion increased 46% year on year , predominantly driven by refi performance Next , the CIB reported net income of 9 billion .

Jeremy Barnum: Next, the CIB reported net income of $9 billion. Revenue of $23.4 billion was up 19% year on year, driven by higher revenues across the businesses. To give a bit more color, IB fees were up 28% year on year, driven by strong performance across M&A and equity underwriting, partially offset by lower debt underwriting. Looking ahead, client engagement and pipelines remain healthy, but of course, developments in the Middle East could have an impact on deal execution and timing. In Markets, fixed income was up 21% year on year with strong performance across the businesses, partially offset by lower revenue and rates. Equities was up 17% from increased client activity. Turning to Asset and Wealth Management, AWM reported net income of $1.8 billion, with pre-tax margin of 35%.

Speaker #3: Revenue of 23.4 billion was up 19% year on year , driven by higher revenues across the businesses . To give a bit more color , IB fees were up 28% year on year , driven by strong performance across M&A and equity underwriting , partially offset by lower debt underwriting .

Speaker #3: Looking ahead on engagement and pipelines remain healthy , but of course , developments in the Middle East could have an impact on deal execution and timing in markets .

Speaker #3: Fixed income was up 21% year on year, with strong performance across the businesses, partially offset by lower revenue in rates. Equities was up 17% from increased client activity. Turning to asset and wealth management.

Speaker #3: IWM reported net income of $1.8 billion, with a pre-tax margin of 35%. Revenue of $6.4 billion was up 11% year on year, predominantly driven by growth in management fees on strong net inflows and higher average market levels, as well as higher brokerage activity.

Jeremy Barnum: Revenue of $6.4 billion was up 11% year-on-year, predominantly driven by growth in management fees on strong net inflows and higher average market levels, as well as higher brokerage activity. Long-term net inflows were $54 billion, with continued strength across fixed income, equity, and multi-asset. AUM of $4.8 trillion was up 16% year-on-year, and client assets of $7.1 trillion were up 18% year-on-year, driven by higher market levels and continued net inflows. Before turning to the outlook, Corporate reported net income of $699 million on revenue of $1.2 billion. In terms of the full year 2026 outlook, we continue to expect NII ex-Markets to be about $95 billion. We now expect total NII to be approximately $103 billion as a function of Markets NII decreasing to about $8 billion, predominantly due to rates, which we expect will be primarily offset in NIR.

Speaker #3: Long term net inflows were 54 billion , with continued strength across fixed income equity and multi-asset AUM of 4.8 trillion was up 16% year on year , and client assets of 7.1 trillion were up 18% year on year , driven by higher market levels and continued net inflows .

Speaker #3: And before turning to the outlook , corporate reported net income of 699 million on revenue of 1.2 billion . In terms of the full year 2026 outlook , we continue to expect NII Ex markets to be about 95 billion .

Speaker #3: We now expect total NII to be approximately 103 billion as a function of markets , and decreasing to about 8 billion , predominantly due to rates , which we expect will be primarily offset in near the adjusted expense .

Jeremy Barnum: The adjusted expense outlook continues to be about $105 billion, and the card net charge-off rate continues to be approximately 3.4%. With that, we're now happy to take your questions. Let's open the line for Q&A.

Speaker #3: Outlook continues to be about 105 billion . And the net charge off rate continues to be approximately 3.4% , with that , we're now happy to take your questions .

Speaker #3: So, let's open the line for Q&A.

Operator 2: If you would like to ask a question, please press star one to be entered into the queue. We kindly request that you ask one question and only one related follow-up. If you would like to ask an additional question, please press star one to be re-entered into the queue. Our first question comes from Steven Chubak with Wolfe Research. Your line is open.

Speaker #2: Thank you. Please stand by. If you would like to ask a question, please press star one to be entered into the queue.

Operator: If you would like to ask a question, please press star one to be entered into the queue. We kindly request that you ask one question and only one related follow-up. If you would like to ask an additional question, please press star one to be re-entered into the queue. Our first question comes from Steven Chubak with Wolfe Research. Your line is open.

Speaker #2: We kindly request that you ask one question and only one related follow up . If you would like to ask an additional question , please press star one to be entered into the queue .

Speaker #2: Our first question comes from Steven Chubak with Wolfe Research. Your line is open.

Steven Chubak: Hi. Good morning, Jamie and Jeremy. Thanks for taking my questions. Maybe to start on the AI cash tool, which, Jamie, you commented on in your letter. There's been lots of focus on this particular, at least launch, given that this is a tool which could potentially result in some consumer deposit pressure, as well as drive some impact on increased competition, as well as higher deposit betas. I was hoping you could just speak to how you see deposit competition unfolding as similar smart tools become more widespread.

Speaker #4: Hi . Good morning . Jamie and Jeremy . Thanks for taking my questions So maybe to start on the AI cash tool , which Jamie , you commented on in your letter .

Speaker #4: There's been lots of focus on this particular, at least, launch, given that this is a tool which could potentially result in some consumer deposit pressure, as well as drive some impact on increased competition, as well as higher deposit betas.

Speaker #4: I was hoping you could just speak to how you see deposit competition unfolding as similar smart tools become more widespread.

Jamie Dimon: Yeah. It's a great question, and obviously there's early stages for this particular product. You have to look at it literally segment by segment, how people manage their money, how they want to manage their money. People are pretty astute at it, particularly the higher net worth. They have tons of choices. They often have money at many different places. The question for us is, how can we make it easier for them to manage their money in a way they're comfortable? Most of you on this call, you have in your mind how much stays in a checking account, and then you write a ticket to a money market fund or a deposit account, something like that. That's all we're trying to do. We provide great values to people.

Speaker #5: Yeah , so it's a great question . And obviously there's early stages for this particular product . So you have to look at it literally segment by segment , how people manage their money , how they want to manage their money .

Speaker #5: People are pretty astute at it, particularly the higher net worth. They have tons of choices. They often have money at many different places.

Speaker #5: And so the question for us is, how can we make it easier for them to manage their money in a way they're comfortable?

Speaker #5: Most of you on this call, you have in your mind how many days are the checking account? And then you write a ticket to a money market fund or a deposit account, something like that.

Speaker #5: And that's all we're trying to do . And , you know , we provide great values to people . You know , if you're a customer of JP , I remind people you have , if you have this product , you have ATM , you got branches , you got advice , you have instant payment systems like Zelle .

Jamie Dimon: If you're a customer of J.P. Morgan, I remind people, if you have this product, you have ATMs, you got branches, you got advice, you have instant payment systems like Zelle. We look at the whole basket, how we can do a better job for the client. Yeah, it may squeeze some margin somewhere and create more competition somewhere. That's life. Jeff Bezos always says your margin is my opportunity, and I kind of agree with that. We're trying to look at the world from the point of view of the customer. What more can we do with them? This is really early stages. As you know, there's tons of competition out there for money.

Speaker #5: So we're looking at the whole basket, how we can do a better job for the client. And yeah, it may squeeze some margins somewhere and create more competition somewhere.

Speaker #5: That's life. Jeff Bezos always says, 'Your margin is my opportunity.' And I kind of agree with that. We're trying to look at the world from the point of view of the customer.

Speaker #5: What more can we do with them? And this is really early stages. And as you know, there's tons of competition out there for money.

Jeremy Barnum: Yeah, exactly. Steve, the only thing I was going to add to that, it's sort of understandable that it's gotten attention because it has sort of AI in it, and it's kind of interesting. As Jamie says, and as you highlighted in your question, competition for deposits has always been very intense. It continues to be intense. We have both external and internal competition from higher-yielding alternatives, and people sort of optimize that, and it's part of running the business. As also Jamie just alluded to, this thing is kind of not even live yet, and it's sort of targeted at a very small subset of the client base, particularly clients with investments, where we think there's an opportunity to take a larger share of the investment wallet as part of this.

Speaker #3: Yeah , exactly . And the only thing I was going to add to that , it's sort of understandable , just gotten attention because it has sort of AI in it and it's kind of interesting .

Speaker #3: But as Jamie says , like , and as you highlighted in your question , competition for deposits has always been very intense . It continues to be intense .

Speaker #3: And we have both external and internal competition from higher-yielding alternatives. And people sort of optimize that. And it's part of running the business.

Speaker #3: And it's also , Jamie just alluded to this thing is like , you know , kind of not even live yet . And it's sort of targeted at a very small subset of the client base , particularly clients with investments where we think there's an opportunity to take a larger share of the investment wallet as part of this .

Jeremy Barnum: It's understandable the amount of interest that it's gotten, but I think the right way to think of it as sort of an experiment right now.

Speaker #3: So I would understand the amount of interest that it's gotten. But I think the right way to think of it is sort of as an experiment right now.

Steven Chubak: No, that's helpful context. Maybe switching gears just to the Basel III capital proposal. Certainly helpful in terms of how you frame some of the shortcomings, some potential areas for improvement. Maybe just focusing in on the RWA inflationary impact, does the guidance that you've laid out contemplate any mitigating actions you might pursue? Is there any potential mitigation that you envisage, and do you have any preliminary views just on the magnitude of SCB relief that you could see from the removal of some of the double counting of markets or operational risk? I recognize that piece is a little bit more opaque.

Speaker #4: You know , that's helpful context and maybe switching gears just to the Basel three capital proposal , certainly helpful in terms of how you frame some of the shortcomings , some potential areas for improvement , but maybe just focusing in on the RWA inflationary impacts .

Speaker #4: Does the guidance that you've laid out contemplate any mitigating actions you might pursue? Is there any potential mitigation that you envisage, and do you have any preliminary views just on the magnitude of SCB relief that you could see from the removal of some of the double-counting of markets or operational risk?

Speaker #4: I recognize that piece is a little bit more opaque.

Jeremy Barnum: Yeah, those are interesting questions. I think obviously we are kind of well-practiced over the course of the last decade and a half on understanding the rules in detail and ensuring that we're using our financial resources efficiently to support the client franchise. I think the hope is that the rules land in a stage where there is nothing in them which sort of takes an otherwise good and healthy business and makes it completely non-economic. I think we've alluded to a couple of areas where, if you look at the presentation slide on the bottom right-hand side, we talked about targeted RWA clarifications needed. There's this issue with high-yield repo collateral and some stuff about advised lines where the proposal's a little bit unclear about what the actual impact would be. In some versions of the world, we think it creates irrational results.

Speaker #3: Yeah , I mean , those are interesting questions . I think . Obviously we are kind of well practiced over the course of the last decade and a half on understanding the rules and detail and ensuring that we're using our financial resources efficiently to support the client franchise .

Speaker #3: So, and I think the hope is that the rules land in the stage where there is nothing in them, which sort of takes an otherwise good and healthy business and makes it completely non-economic.

Speaker #3: I think we've alluded to a couple of areas where , you know , if you look at the presentation slide on the bottom right hand side , we talked about targeted RWA clarifications needed .

Speaker #3: There's this issue with, like, high-yield repo collateral and some stuff about advise lines where, you know, the proposal is a little bit unclear about what the actual impact would be.

Speaker #3: And then some versions of the world, we think it creates irrational results, but broadly, I don't think this is a story about optimization at this point.

Jeremy Barnum: Broadly, I don't think this is a story about optimization at this point. I think this is a story about a rule set that is converging to a place, and then we need to just grow the business and deploy the resources to serve our clients. Obviously, we have said a lot about GSIB on this page. I guess I don't really have more to say unless you ask just a big question on GSIB, but that is the one area where we think it's kind of a significant disincentive to a particular type of business, in particular some markets business.

Speaker #3: I think this is a story about a rule set that is converging to a place, and then we need to just grow the business and deploy the resources.

Speaker #3: To serve our clients . Obviously , we have said a lot about Gsib on this page . You know , and I guess I don't really have more to say unless you have specific question on Gsib , but that is the one area where we think it's kind of a significant disincentive to a particular type of business .

Speaker #3: And in particular, some markets business. And I guess I would just make the point that we've often made publicly, that the depth and breadth of U.S. capital markets is a key competitive national advantage.

Jeremy Barnum: I guess I would just make the point that we've often made publicly that the depth and breadth of US capital markets is a key competitive national advantage, and regulatory capital rules that at the margin discourage a dynamic secondary market in the United States with active participation by banks is, in our view, sort of not great. That's part of the reason that we're so focused on GSIB, because it disproportionately affects that business.

Speaker #3: And regulatory capital rules that at the margin , discourage , you know , a dynamic , you know , secondary market in the United States with active participation by banks is , in our view , sort of not great .

Speaker #3: So that's part of the reason that we're so focused on GSIB, because it disproportionately affects that business.

Steven Chubak: Anything you could speak to just in terms of the removal of the double counting?

Speaker #4: Anything you could speak to just in terms of the removal of the double counting?

Jeremy Barnum: Oh, yeah. Sorry, I forgot about that part of your question. Yeah. As you know, we're currently below the floor, right? Obviously, if that is the new normal, then if the double count is addressed by removing further things from stress testing, it wouldn't have an impact. If the double count is addressed by modifying the operational risk calculation in RWA, then it might have some impact. Obviously, it's far from guaranteed that we will be a bank that is permanently below the floor. I suspect that issue is more relevant for institutions whose business mix is such that they're going to tend to structurally be above the floor. It's a little bit unclear for us as things settle down, whether we're going to bounce around above and below the floor or tend to be structurally above the floor. We'll see.

Speaker #3: Oh , yeah . Sorry , I forgot about that part of your question . Yeah . So as you know , like we're currently below the floor , right ?

Speaker #3: So obviously , if that is like the new normal , then if the double count is addressed by removing further things from stress testing , it wouldn't have any impact if the double count is addressed by modifying the operational risk calculation in Norway , then it might have some impact .

Speaker #3: And obviously, it's far from guaranteed that we will be a bank that is permanently below the floor. But I suspect that issue is more relevant for institutions whose business nexus is such that they're going to tend to structurally be above the floor.

Speaker #3: It's a little bit unclear for us, as things settle down, whether we're going to bounce around above and below the floor or tend to be structurally above the floor. We'll see.

Jeremy Barnum: I think removal of the double count is definitely something we support. It's probably not our number one priority at this point because some progress has been made on that front.

Speaker #3: But I think removal of the double count is definitely something we support. It's probably not our number one priority at this point, because some progress has been made on that front.

Jamie Dimon: Yeah. Can I just also just mention on the global market shock, it's never been in the real world all these years, including during the COVID, and then before the great crisis, nothing like what they have. We already have $80 billion or $90 billion of capital for the trading books. Those numbers just they're completely out of whack with reality. Operational risk capital, I can't avoid saying it, is another crazy, obtuse one in 1,000 year thing. Worse than that in my opinion, they create risk-weighted assets. Every company in the world has operational risk, and they artificially create risk-weighted assets which do not exist. This locks up a lot of capital liquidity for eternity for no good reason. I understand there's operational risk.

Speaker #5: Yeah . Can I just also just mention on the market , global market shock has never been in the real world all these years , including during the Covid , Covid , and then before the Great .

Speaker #5: There's nothing like what they have. And we already have $80 billion or $90 billion of capital for the trading books. So those numbers are just—they're completely out of whack with reality.

Speaker #5: And operational risk capital . I can't avoid saying it is another crazy , obtuse 1 in 1000 year thing . And then worse than that , my opinion , they create risk weighted assets .

Speaker #5: You know, every company in the world has operational risk, and they artificially create risk-weighted assets which do not exist. And this locks up a lot of capital and liquidity for eternity for no good reason.

Speaker #5: And I understand there's operational risk . I think there are real ways to measure it . By the way , which I point , I point out , which is not this artificial , you know , over architected academic exercise , but , you know , there's operational risk and margin loans that L.A.

Jamie Dimon: I think there are real ways to measure it, by the way, which I point out, which is not this artificial, over-architected academic exercise. There's operational risk in margin loans that are late and using subprime collateral as opposed to prime collateral, and how you process things. That's what they should really be focusing, reducing actual operational risk as opposed to these calculations which you can't change. If it all comes from the mortgage business and you got out of the mortgage business, it still stays there. Who would do something like that? It's time to really look at this stuff and do it right.

Speaker #5: , you know , and using subprime collateral as opposed to prime collateral . And you know , how you process things . And , and that's what they should really be focusing , you know , reducing actual operational risk as opposed to these calculations , which you can't change .

Speaker #5: Like, if you—if it all comes from the mortgage business and you got out of the mortgage business, it still stays there.

Speaker #5: Like, who would do something like that? And so, it's time to really look at this stuff and do it right.

Steven Chubak: Well said. Well, thanks so much for taking my questions.

Speaker #4: Well said. Well, thanks so much for taking my questions.

Jeremy Barnum: Thanks, Steven.

Speaker #3: Thanks , Steven .

Operator 2: Thank you. Our next question comes from Erika Najarian with UBS. You may proceed.

Operator: Thank you. Our next question comes from Erika Najarian with UBS. You may proceed.

Speaker #2: Thank you. Our next question comes from Erika Najarian with UBS. You may proceed.

Erika Najarian: Yes. Thank you. Good morning. Jeremy, my first question is for you. You modified the Markets NII outlook given the change in rates between end of February and today. I'm wondering, as we think about the ex-Markets NII number of $95 billion, you retain that. What are sort of the offsets to higher rates in the asset sensitivity if we don't have cuts for the rest of the year?

Speaker #6: Yes . Thank you . Good morning Jeremy . My first question is for you . You modified the markets NII outlook . Given the change in rates between end of February and today , I'm wondering , as we think about the X markets , NII number of 95 billion .

Speaker #6: You know , you retain that . What are sort of the offsets to , you know , higher rates in the asset sensitivity ?

Speaker #6: You know, if we don't have cuts for the rest of the year?

Jeremy Barnum: Yeah, sure. It's a good question because I think we have said that we're asset sensitive and rates are a little bit higher as a removal of the cuts in H2 of the year. You might have otherwise expected us to revise the NII ex markets up a little bit. Just to do a little mental math, the EAR that we've just disclosed is $1.8 billion. As a result of the fact that the cuts were pretty backdated, the impact on the full year average is only about 20 basis points. The amount of upward revision that you might have otherwise expected is really quite small when you do that math.

Speaker #3: Yeah, sure. So it's a good question because I think we have said that we're asset sensitive, and rates are a little bit higher as a removal of the cuts in the back half of the year.

Speaker #3: And so you might have otherwise expected us to revise the Knicks market's up a little bit. But just to do a little mental math, the year that we've just disclosed is $1.8 billion.

Speaker #3: As a result of the fact that the cuts were pretty backdated, the impact on the full-year average is only about 20 basis points.

Speaker #3: So, you know, the amount of upward revision that you might have otherwise expected is really quite small, when you do that math.

Jeremy Barnum: There were some other bits of up and down noise and some rounding effects. That is essentially the reason the numbers aren't changed. I don't think there's too much to read into it.

Speaker #3: And there were some other bits of up-and-down noise and some rounding effects. So that is essentially the reason the numbers are unchanged.

Speaker #3: I don't think there's too much to read into it.

Erika Najarian: Got it. Perfectly clear. My second question is for Jamie. Of course, we were all unpacking your Chairman's letter from a few weeks ago, and one of the topics that you wrote about, and you've spoken about at length in the past is on private credit. I think we fully appreciate what JPMorgan's view here is. Given all of the headlines that this topic has garnered, I guess the question here for you and your team is, if we do have a recession and higher defaults and higher severity and cumulative losses in leveraged lending, what is the ultimate loss back to the banks? Because as we understand, the banks are fairly well protected in terms of structure.

Speaker #6: Got it . Perfectly clear . And my second question is for Jamie . Of course , we were all unpacking your chairman's letter from a few weeks ago , and one of the topics that you wrote about , and you've spoken about at length in the past , is on private credit .

Speaker #6: And I think we fully appreciate what JP Morgan's view here is . But given all of the headlines that this topic has garnered , I guess the question here for you and your team is , you know , if we do have a recession and higher defaults and higher severity and accumulative losses and leveraged lending , what is the ultimate loss back to the banks ?

Speaker #6: Because as we understand , the banks are fairly well protected in terms of structure . And while you address this in your letter , for those that maybe hadn't had time to read it and that are listening to this call , do you think that if we do have a default cycle in private credit , that it will be systemic

Erika Najarian: While you address this in your letter, for those that maybe hadn't had time to read it and that are listening to this call, do you think that if we do have a default cycle in private credit, that it will be systemic?

Jamie Dimon: No, I was quite clear. I don't think so. I gave them big numbers. Private credit, leveraged lending is like $1.7 trillion. High-yield bonds are something like $1.7 trillion. Bank syndicated leveraged loans are like $1.7 trillion. Investment-grade debt's $13 trillion. Mortgage debt's like $13 trillion. There's a lot of other stuff out there. I pointed out that, yeah, I think there's been some weakening in underwriting, and not just by private credit, elsewhere. There will be a credit cycle one day. I think when there's a credit cycle, losses will be worse than people expect relative to the scenario. I don't think it's systemic. It almost can't be systemic at that size relative to anything else. When recessions happen and values go down and people refi at higher rates, there'll be stress and strain in the system.

Speaker #5: I mean , I was quite clear , I don't think so . And I gave them big numbers , private credit , leveraged lending is like 1.7 trillion high yield bonds are like something like 1.7 trillion banks .

Speaker #5: Syndicated, leveraged loans are like $1.7 trillion. Investment grade debt is $13 trillion. Mortgage debt is like $13 trillion. And there's a lot of other stuff out there.

Speaker #5: And I pointed out that I think there's been some weakening in underwriting, and not just by private credit—elsewhere as well. And there will be a credit cycle one day.

Speaker #5: And I think when there's a credit cycle, losses will be worse than people expect relative to the scenario. I don't think it's systemic.

Speaker #5: It almost can't be systemic at that size relative to anything else. But you know, when recessions happen and values go down and people have higher rates, there'll be stress and strain on the system.

Jamie Dimon: Are people prepared for that? I can't speak for other banks, but most of these things are, you have to have very large losses in private credit before at least it looks like banks are going to get hit or something like that. It doesn't mean you won't feel some stress and strain, and you might have to do something about it, but I'm not particularly worried about it. What I'd be more worried about, when there's a credit cycle, how's that going to filter through the whole system? That, to me, is a bigger issue. I also pointed out, corporations, in general, the debt's not too high. Consumers, in general, the debt's not too high. Most of the excess debt is in government debt at this point.

Speaker #5: And , you know , are people prepared for that ? I can't speak for other banks , but these are most of these things are , you know , are there on top of you have to have very large losses in private credit before at least it looks like banks are going to get hit or something like that .

Speaker #5: So, it doesn't mean you won't feel some stress and strain. And you might have to do something about it. But I'm not particularly worried about it.

Speaker #5: I'd be more worried about whether the credit cycle—how is that going to filter through the whole system? That, to me, is a bigger issue.

Speaker #5: But I also pointed out corporations in general , the debts not too high , consumers in general are just not too high . Most of the excess debt is in , government debt at this point .

Jamie Dimon: There are positives and negatives as you look at what's going to happen if there's a cycle. Of course, we always worry about what happens when there's a cycle. Like I said, I think it'll be worse than people expect. You can go look at what happens in other cycles to various credit and industries, et cetera. The other thing which almost always happens is that there's an industry which surprises people. If you go back to the year 2000, people were surprised there was utilities and telecom. Grandma stocks that got hit. Things changed. You go into 2008, it was media companies and newspapers. Warren Buffett stocks. Things change. This time you have all the twittering going about software, which we'll see. It might be software, it might not. Something always happens that people don't expect in credit.

Speaker #5: And so there are positives and negatives . If you look at what's going to happen , if there's a cycle . And of course , we always worry about what happens in their cycle .

Speaker #5: And like I said, I think it'll be worse than people expect. And you can go look at what happens to other cycles, to various credit and industries, etc.

Speaker #5: the other , the other thing , which almost always happens is that there's an industry which surprises people . So if you go back to year 2000 , people are surprised .

Speaker #5: There was utilities and telecom , you know , grandma's stocks that got hit , things changed . And if you go over to oh eight , it was media companies and newspapers .

Speaker #5: Warren Buffett stocks things changed this time . You know , you have all the tuna running about software , which we'll see . You know , it might be software might not , but something always happens if people don't expect in credit

Erika Najarian: Thank you both.

Speaker #6: Thank you both .

Jamie Dimon: Thanks, Erika.

Operator 2: Thank you. Our next question comes from John McDonald with Truist Securities. Your line is open.

Operator: Thank you. Our next question comes from John McDonald with Truist Securities. Your line is open.

Speaker #3: Thanks , Erica .

Speaker #2: Thank you. Thank you. Our next question comes from John McDonald with Truist Securities. Your line is open.

John McDonald: Hi, good morning. I wanted to ask you a question about reserves. Could you talk about scenario weighting and how your evolving views on the macro risks out there factor into your reserve setting process and how that played out this quarter?

Speaker #7: Hi. Good morning. I wanted to ask you a question about reserves. Can you talk about scenario weighting and how you're evolving views on the macro risks out there?

Speaker #7: Factor into your reserve setting process and how that played out this quarter.

Jamie Dimon: Yeah, John, good question because I think at a high level, if you look at the allowance, it's quite small, and you might wonder what's going on there given everything that's happening in the Middle East, especially given our historical stance about wanting to be conservative, and concerns about the geopolitical dynamics. A couple of things in there. One, as you know, we start the reserve, the allowance calculation process with a sort of model-based approach that's based on economic forecasts. Actually, just to make it easier to track, let me start with a little bit the punchline, which is we actually did not change the weights this quarter. With that said, on sort of unchanged weights flowing through, the economic outlook actually lowered the weighted average unemployment rate in the allowance build-out from 5.8 to 5.6.

Jeremy Barnum: Yeah, John, good question because I think at a high level, if you look at the allowance, it's quite small, and you might wonder what's going on there given everything that's happening in the Middle East, especially given our historical stance about wanting to be conservative, and concerns about the geopolitical dynamics. A couple of things in there. One, as you know, we start the reserve, the allowance calculation process with a sort of model-based approach that's based on economic forecasts. Actually, just to make it easier to track, let me start with a little bit the punchline, which is we actually did not change the weights this quarter. With that said, on sort of unchanged weights flowing through, the economic outlook actually lowered the weighted average unemployment rate in the allowance build-out from 5.8 to 5.6.

Speaker #3: Yeah . John , good question , because I think at a high level , if you look at the allowance , it's like quite small and you might wonder , like what's going on there ?

Speaker #3: Given everything that's happening in the Middle East, especially given our historical stance about wanting to be conservative and concerns about the geodynamics.

Speaker #3: So, a couple of things in there. One, as you know, we start the reserve allowance calculation process with a sort of model-based approach.

Speaker #3: That's based on economic forecasts . And so , and actually , just to make it easier to track . Let me start with a little bit the punch line , which is we actually did not change the wage this quarter .

Speaker #3: And so with that said , on sort of unchanged wage flowing through the economic outlook actually lowered the weighted average unemployment rate in the in the allowance build up from 5.8 to 5.6 .

Jamie Dimon: That created some tailwinds across the numbers, primarily in consumer, but also a little bit in wholesale. We also had a little bit of a release consumer in Home Lending. I think it was about $150 million, maybe $110 or something, which was an HPI upward revision, so kind of unrelated to everything else. Under the covers, there are some builds in wholesale as a function of loan growth and also some idiosyncratic downgrades here and there. Nothing dramatic. In the place that you would expect to see allowance build, you are seeing some. At a high level, we did sort of have a very conscious debate about this as a company, like should we add downside skew to the weights this quarter given everything that's going on?

Jeremy Barnum: That created some tailwinds across the numbers, primarily in consumer, but also a little bit in wholesale. We also had a little bit of a release consumer in Home Lending. I think it was about $150 million, maybe $110 or something, which was an HPI upward revision, so kind of unrelated to everything else. Under the covers, there are some builds in wholesale as a function of loan growth and also some idiosyncratic downgrades here and there. Nothing dramatic. In the place that you would expect to see allowance build, you are seeing some. At a high level, we did sort of have a very conscious debate about this as a company, like should we add downside skew to the weights this quarter given everything that's going on?

Speaker #3: So that created some tailwinds across the numbers . And , you know , primarily in consumer , but also a little bit in wholesale .

Speaker #3: And we also had a little bit of a release, consumer, in home lending. I think it was about $150 million, which was an HP, or maybe $110 million or something.

Speaker #3: But anyway, which was an HPI upward revision. So, kind of unrelated to everything else under there. There are some builds in wholesale as a function of loan growth, and also some idiosyncratic downgrades here and there.

Speaker #3: Nothing dramatic , but , you know , in the place that you would expect to see allowance build , you are seeing some .

Speaker #3: But at a high level, we did sort of have a very conscious debate about this as a company, like, should we add downside skew to the wage this quarter, given everything that's going on, and our conclusion was that the existing kind of conservative bias in the allowance was sufficient.

Jamie Dimon: Our conclusion was that the existing kind of conservative bias in the allowance was sufficient, and we would just wait and see how things developed. Hopefully they don't, but if we get some of the downside case outcomes with higher energy prices that wind up having an impact on the core global economic outlook, then that would actually flow naturally through the process. We can see kind of how that plays out.

Jeremy Barnum: Our conclusion was that the existing kind of conservative bias in the allowance was sufficient, and we would just wait and see how things developed. Hopefully they don't, but if we get some of the downside case outcomes with higher energy prices that wind up having an impact on the core global economic outlook, then that would actually flow naturally through the process. We can see kind of how that plays out.

Speaker #3: And we would just wait and see, to see how things developed. And to the extent that things, you know, hopefully they don't.

Speaker #3: But if we get some of the downside case outcomes with higher energy prices, that could wind up having an impact on the core global economic outlook, and that would actually flow naturally through the process.

Speaker #3: And so we'll, we can see kind of how that plays out.

John McDonald: Okay. Thanks, Jeremy. Separately, was wondering about any changes to your outlook for loan and deposit growth, your balance sheet.

Speaker #7: Okay, thanks, Jeremy. And then, separately, I was wondering about any changes to your outlook for loan and deposit growth. Balance sheet growth was very strong this quarter.

John McDonald: Growth was very strong this quarter, a lot of it seeming to be in the Markets business. Just looking for more color on the drivers of growth this quarter and how it affects your outlook for loan and deposit growth this year.

Speaker #7: A lot of it seeming to be in the markets business. So just looking for more color on the drivers of growth this quarter, and how it affects your outlook for loan and deposit growth this year.

Jeremy Barnum: Sure. So I would say that this quarter's growth, yeah, as you said, primarily markets, primarily low-density stuff. It's not contributing a lot to RWA, secured financing of various sorts, and a lot of that's seasonal. So there is a sort of background trend of growth in the size of the markets business and in the size of the markets balance sheet. But I don't think that anything happened this quarter that was sort of particularly off-trend in that respect. In terms of the firm-wide overall outlook, I think arguably the single most significant number is what we said about card loan growth expectations at company update, which is that we said we expected 6% or maybe a little bit more, and that hasn't really changed. That's still kind of our core expectation. In the rest of the franchise, it's really pretty modest growth overall.

Speaker #3: Sure . So I would say that this quarter's growth yeah , as you said , it's primarily markets . It's primarily low density stuff .

Speaker #3: It's not contributing a lot to RWA-secured financing of various sorts. And a lot of that is seasonal. So there is a sort of background trend of growth in the size of the markets business.

Speaker #3: And then the size of the markets' balance sheet. But I don't think that anything happened this quarter that was sort of particularly off trend in that respect, in terms of the firmwide overall outlook.

Speaker #3: I think, arguably, the single most significant number is what we said about card loan growth expectations at the company update, which is that we said we expected 6%, or maybe a little bit more, and that hasn't really changed.

Speaker #3: That's still kind of our core expectation . And the rest of the franchise , it's really pretty modest growth overall . We actually have some headwinds in home lending as a result of some public portfolio roll off and stuff like that .

Jeremy Barnum: We actually have some headwinds in Home Lending as a result of some First Republic portfolio roll-off and stuff like that. To a significant degree, some of that's going to get driven by acquisition financing that would hold on balance sheet for a while. Some of that's a little bit of a driver this quarter as well. Of course, if things deteriorate, which we very much hope they don't, that tends to produce lower loan demand. We'll see what happens there, but we're going to be there for our clients for whatever they need. The final building block of this is Markets, which as you know, has been actually, interestingly enough, the primary driver of wholesale loan growth recently. There, it's going to be very opportunistic.

Speaker #3: But , you know , to a significant degree , some of that's going to get driven by acquisition , financing that we hold on balance sheet for a while , that some of that's a little bit of a driver of this quarter as well .

Speaker #3: And of course , you know , if things deteriorate , which we very much hope they don't , that tends to produce lower loan demand .

Speaker #3: So we'll see what happens there . But we're going to be there for our clients for whatever they need . And then the final building block of this is markets , which as you know , has been actually , interestingly enough , the primary driver of wholesale loan growth recently , but there it's going to be very opportunistic .

Jeremy Barnum: A lot of it is kind of the data center lending type stuff and related things where we're going to participate when the terms make sense, but we're going to be very willing to walk away if we don't like it. That's going to be more a matter of just seeing what the opportunity set looks like and how we feel about the risks.

Speaker #3: You know, a lot of it is kind of the data center type stuff, and related things, where we're going to participate when the terms make sense, but we're going to be very willing to walk away if we don't like it.

Speaker #3: And so that's going to be more a matter of just seeing what the opportunity set looks like and how we feel about the risks.

Jamie Dimon: Okay. Thank you.

John McDonald: Okay. Thank you.

Speaker #7: Okay .

Speaker #8: Thank you .

Jeremy Barnum: Thanks, John.

Speaker #3: Thanks .

Speaker #8: John .

Operator 2: Thank you. Our next question comes from Manan Gosalia from Morgan Stanley. Your line is open.

Operator: Thank you. Our next question comes from Betsy Graseck from Morgan Stanley. Your line is open.

Speaker #2: Thank you. Our next question comes from Manon Gosalia from Morgan Stanley. Your line is open.

Manan Gosalia: Hi. Good morning. Jeremy, you have one of the best views on the US consumer. You mentioned that the economy is resilient, the consumer is healthy. Could you give us some more color on what you're seeing there? How resilient is consumer spend and credit if energy prices remain high? Are there any signs of cracks that you're seeing at all?

Betsy Graseck: Hi. Good morning. Jeremy, you have one of the best views on the US consumer. You mentioned that the economy is resilient, the consumer is healthy. Could you give us some more color on what you're seeing there? How resilient is consumer spend and credit if energy prices remain high? Are there any signs of cracks that you're seeing at all?

Speaker #9: Hi . Good morning . Jamie . Jeremy , you have one of the best views in on the US consumer . You mentioned that the economy is resilient .

Speaker #9: The consumer is healthy. Can you give us some more color on what you're seeing there? How resilient is consumer spend and credit?

Speaker #9: If energy prices remain high, are there any signs of cracks that you're seeing at all?

Jeremy Barnum: Yeah, it's a good question. It's the right question. It's a question we get a lot, and I sort of struggle to say something new and interesting every quarter. There really is not anything new or interesting to say this quarter. We've looked at it through every angle, early roll rates, delinquency rates, cash buffer, spend, discretionary spend, non-discretionary spend. It all looks consistent with prior trends and fundamentally healthy. Let me add maybe just a little bit of nuance in the context of energy prices and what's going on this quarter. I think gas or energy cost is something like 3% of the typical consumer's expenditure, at least in our portfolio. It's not nothing, but it's not overwhelming. We've looked to see if there's kind of evidence in there of people trading, decreasing other discretionary spending to adjust for higher gas prices.

Speaker #3: Yeah . So , you know , it's a good question . It's the right question . It's a question we get a lot .

Speaker #3: And I sort of struggled to say something new and interesting every quarter. There really is not anything new or interesting to say this quarter.

Speaker #3: We've looked at it through every angle . You know , early role rates , delinquency rates , cash buffer spend , discretionary spend , non-discretionary spend .

Speaker #3: It all looks consistent with prior trends . And , you know , fundamentally healthy . So let me add maybe just a little bit of nuance in the context of energy prices and what's going on this quarter .

Speaker #3: So I think , you know , gas or energy costs is something like 3% of the typical consumer's expense expenditure , at least in our in our portfolio .

Speaker #3: So it's not nothing , but it's not overwhelming . We've looked to see if there's kind of evidence in there of people , you know , trading decreasing other discretionary spending to adjust for higher gas prices .

Jeremy Barnum: It's just kind of not enough yet to be visible. I would caution, though. I think it remains fundamentally the case that the biggest single reason that the consumer credit performance is healthy is that the labor market is strong. If you get bad outcomes in the Middle East, much higher energy prices, or other problems that sort of do eventually crack what has been, I think from many people's perspective, a surprisingly resilient American economy and a very resilient US consumer, and that winds up having knock-on effects on the labor market, then you will see that come through, clearly. Right now, in the end, the story remains the same, which is resilient consumer that's doing fine despite higher gas prices.

Speaker #3: But it's just kind of not enough yet to be visible . I would caution though , I think it remains fundamentally the case that the biggest single reason that the consumer credit performance is healthy is that the labor market is strong .

Speaker #3: And , you know , if you get , you know , a bad outcomes in the Middle East , much higher energy prices or other problems that sort of do eventually track what has been , I think for many people's perspective , surprisingly resilient American economy in a very resilient US consumer .

Speaker #3: And that winds up having knock on effects on the labor market , then you will you will see that come through clearly . But right now , in the end , the story remains remains the same , which is resilient consumer that's doing fine despite higher gas prices .

Jamie Dimon: Yeah. I would just add, we're really getting too fine-tuned here. It's being helped right now by higher tax refunds, too.

Speaker #5: And I would just add really getting to fine tuned here , but it's being helped right now by higher tax refunds to

Jeremy Barnum: Yeah, exactly.

Speaker #3: Yeah .

Speaker #8: Exactly .

Manan Gosalia: That's really helpful. Thank you. A separate follow-up, just on the trading business. One is, are you seeing any signs of bad volatility here, or were things in March still pretty good? If we look at trading assets that were up pretty significantly quarter-on-quarter, was there anything specific in the environment that drove that? Was that business as usual, or is this some of the deployment, the ongoing deployment of excess capital, Jeremy, that you've been talking about?

Betsy Graseck: That's really helpful. Thank you. A separate follow-up, just on the trading business. One is, are you seeing any signs of bad volatility here, or were things in March still pretty good? If we look at trading assets that were up pretty significantly quarter-on-quarter, was there anything specific in the environment that drove that? Was that business as usual, or is this some of the deployment, the ongoing deployment of excess capital, Jeremy, that you've been talking about?

Speaker #9: That that's really helpful . Thank you . And then Sarah , follow up just on the trading business , you know , one is a you seeing any signs of bad volatility here or are things , you know , with things in March still pretty good .

Speaker #9: And then, if we look at trading assets that were up pretty significantly quarter on quarter, was there anything specific in the environment that drove that?

Speaker #9: Was that business as usual or is this some of the deployment , the ongoing deployment of excess capital ? Jeremy , that that you've been talking about

Jeremy Barnum: Okay. Sorry. I think there are several embedded questions in your follow-up question. Let me try to do this efficiently. In short, no. We haven't really seen any so-called bad volatility. I mean, I'm sure there are pockets of that in some markets. Broadly, at a high level, I think what we mean by that is the types of extremely gappy, discontinuous markets with low liquidity that keep clients on the sidelines. As I say, I'm sure there have been pockets of that in certain sub-segments of certain asset classes. In general, that has not been a characteristic of this quarter, which is, I think, part of the reason that the performance has been very good. On trading assets, as I said a second ago, I think that was mostly BAU growth, mostly seasonal, low risk density.

Speaker #3: Okay . So sorry , I think there are several embedded questions in your follow up questions . So let me try to do this efficiently .

Speaker #3: So in short , no , we haven't really seen any so-called bad volatility . I mean I'm sure there are pockets of that in some markets .

Speaker #3: But broadly at a high level , I think what we mean by that is the types of extremely gappy discontinuous markets with low liquidity that keep clients on the sidelines .

Speaker #3: And as I say , I'm sure there have been pockets of that in certain subsegments of certain asset classes . But in general , that is not has not been a characteristic of this quarter , which is , I think , part of the reason that the performance has been very good on trading assets , as I said , a second ago , I think that was mostly poor growth , mostly seasonal , low risk density .

Jamie Dimon: You know, not particularly a function of capital deployment one way or the other. I think to the extent that that plays out, that'll be a longer-term phenomenon. Just to refer you back to my comments at company update, I think to really get that right, you need both to free up capital, but also to free up liquidity to allow banks to deploy against the broadest possible set of opportunities to support the real economy, not just kind of high risk density opportunities that require less liquidity per unit of capital.

Jeremy Barnum: You know, not particularly a function of capital deployment one way or the other. I think to the extent that that plays out, that'll be a longer-term phenomenon. Just to refer you back to my comments at company update, I think to really get that right, you need both to free up capital, but also to free up liquidity to allow banks to deploy against the broadest possible set of opportunities to support the real economy, not just kind of high risk density opportunities that require less liquidity per unit of capital.

Speaker #3: And , you know , not particularly a function of capital deployment one way or the other . I think to the extent that that plays out , that'll be a longer term phenomenon .

Speaker #3: And just to refer you back to my comments at company update , I think to really get that right , you need both , you know , to free up capital , but also to free up liquidity to allow banks to deploy against the broadest possible set of opportunities .

Speaker #3: Is what the real economy , not just kind of high risk density opportunities that require less liquidity per unit of .

Speaker #8: Capital .

Manan Gosalia: I appreciate that. Thanks for taking my questions.

Betsy Graseck: I appreciate that. Thanks for taking my questions.

Speaker #9: I appreciate that. Thanks for taking my questions.

Jamie Dimon: Thanks.

Jeremy Barnum: Thanks.

Speaker #8: Thanks .

Operator 2: Thank you. Our next question comes from Mike Mayo with Wells Fargo Securities. Your line is open.

Operator: Thank you. Our next question comes from Mike Mayo with Wells Fargo Securities. Your line is open.

Speaker #2: Thank you . Our next question comes from Mike Mayo with Wells Fargo Securities . Your line is open .

Mike Mayo: Hi. Jamie, in your CEO letter, as was mentioned, you talked about private credit, and you mentioned the $1.7 trillion private credit market, which didn't really exist two decades ago, as you know. How much of that $1.7 trillion would you say is a substitution effect from banks to private credit, and how much of that might be types of credit you never would have originated in the first place? With the regulatory changes and with what's happening in the market, do you think you can recapture some of that share? More generally, what are you doing with regard to the collateral? There were news headlines this past quarter that you're becoming more conservative with that. Lastly, what kind of spreads are you getting? Are the spreads improving on this or staying the same?

Speaker #10: Hi, Jamie. And your CEO letter was mentioned. You talked about private credit, and you mentioned the $1.7 trillion private credit market, which didn't really exist two decades ago.

Speaker #10: As you know , how much of that 1.7 trillion would you say is a substitution effect from banks to private credit ? And how much of that might be types of credit ?

Speaker #10: You never would have originated in the first place . And with the regulatory changes and with what's happening in the market , do you think you can recapture some of that share and more generally , what are you doing with regard to the collateral ?

Speaker #10: There ? New headlines in past quarter about you were becoming more conservative with that . And and lastly , what kind of threats are you getting ?

Speaker #10: Are the threads improving on this or staying the same ?

Jamie Dimon: Yeah. Those are all really good questions. The $1 trillion you said actually was there before. There was always this. Banks did it. In some ways, it was arbitrage because banks were really discouraged from doing leveraged lending over a certain amount of leverage. Of course, the competitive world finds new ways to do things, which we're not against how they do it. There's a little bit of rate arbitrage and all these various things. I do think it's really hard to say that half of it probably was arbitrage, that banks could pick up some of that. Banks also look at relationships differently. When a bank does a loan in middle-market leveraged lending, that's what this is. We've been doing this for a long period of time, but we look at the relationship more extensively.

Speaker #5: Yeah . So , you know , those are all really good questions . So the there actually was there before , there was always this and banks did it in some ways it was arbitrage because banks were , you know , were really discouraged from doing leveraged lending over a certain amount of over a certain amount of leverage .

Speaker #5: And then , of course , you know , the competitive world finds new ways to do things , which we're not against . You know , how do they do it ?

Speaker #5: There's a little bit of ratings arbitrage and all these various things , but I do think I mean , it's really hard to say that half of it probably was arbitrage that , you know , banks will pick up some of that , you know , banks also look at relationships differently .

Speaker #5: You know , when a bank does a loan and middle market leveraged lending , that's what this is . We've been doing this for a long period of time , but we look at the relationship through extensively , not just the loan , but the rest of relationship payments , custody , you know , asset management type of services , etc.

Jamie Dimon: Not just the loan, but the rest of the relationship, payments, custody, asset management type of services, et cetera. Maybe some will come back. I'm not particularly concerned about it. The spreads, you could just track how spreads move around. Every bank does it differently, and every bank charges differently, and stuff like that. Depending on how concerned they are, they're going to raise the spreads and what they're charging for private credit. Private credit spreads themselves and what they charge their clients have gone up and down. You've actually seen loans go back and forth every now and then from the private credit market to the bank syndicated loan market. We'll see. We always had what we call marking rights, to look at the underlying collateral. That's just a right that protects you and gives you certain rights, things like that.

Speaker #5: . So maybe some will come back . I'm not particularly concerned about it . And the spreads , you know , you can just track how spreads move around every bank does it differently and every bank charges differently , stuff like that .

Speaker #5: But you know, depending on how concerned they are, they're going to raise their spreads and what they're charging for private credit. Private credit spreads themselves and what they charge their clients have gone up and down.

Speaker #5: And you've actually seen loans go back and forth every now and then from the private credit markets to the bank syndicated loan market .

Speaker #5: So we'll see . And we always had what we call marketing rights , you know , to look at the underlying collateral . And that's just a right that protects you and gives you certain rights , things like that .

Jamie Dimon: Obviously, if you ever see credit getting worse, and it's gotten not terribly worse, the actual credit, which a lot of these private credit guys have pointed out, the actual credit hasn't gotten that much worse. There are pockets where it has, and credit spreads themselves haven't gotten much worse in general, but there are pockets where it has. We'll be watching it closely. We think we're okay on all that. It remains to be seen. I think the big point to me, Mike, is I don't think it's systemic, but I do think when the credit cycle, and I'm not referring to private credit here, because of underwriting and leverage and PIKs and competition, and we've had a cycle for a long time, a lot of people are late to this game. I just don't expect every player is going to be the same.

Speaker #5: You know , obviously , if you ever see credit getting worse and it's gotten not terribly worse , the actual credit , which a lot of these private equity , private credit guys points out , the actual credit hasn't gotten that much worse .

Speaker #5: There are pockets where it has and , you know , and credit spreads themselves haven't gotten much worse in general . But there are pockets where it has .

Speaker #5: So we'll be watching it closely . We think , you know , we're okay on all of that . You know , it remains to be seen .

Speaker #5: I think the big point to me , Mike , is I don't think it's systemic , but I do think there's a credit cycle and I'm not referring to private credit here because of underwriting and leverage and picks and competition .

Speaker #5: And we've had a cycle for a long time . A lot of people are late to this game . I just don't expect every player is going to be the same .

Jamie Dimon: It won't be a bell curve. It'll be something different than that, and people will be surprised that some of the players aren't particularly good at it. That business will probably come back to banks.

Speaker #5: I think some will be. It won't be a bell curve. It will be something different than that, and people can be surprised that some of the players aren't particularly good at it, and that business will probably come back to banks.

Mike Mayo: Separately, Jeremy, you mentioned no change in the core NII despite being asset sensitive. In terms of the deposit growth, you had some really amazing deposit growth and then kind of hit an air pocket for a little while. In this quarter, consumer deposits were up 2%. I guess tax has probably helped that out. Is this the start to getting back on that higher deposit growth path or not yet?

Speaker #10: And then separately , chairman , you mentioned no change in the core NII despite being asset sensitive . And in terms of the deposit growth , you had some really amazing deposit growth .

Speaker #10: And then kind of hit an air pocket for a little while . In this quarter , consumer deposits were up 2% . I guess taxes probably helped that out .

Speaker #10: Is this the start to getting back on that higher deposit growth path, or not yet?

Jeremy Barnum: Well, I think air pocket is a little bit of a strong word, but fair enough. I recognize the dynamic that you're describing, and I think it's a little bit too early to sort of say, like, yay, we're back with super robust consumer deposit growth. Partially because of your point actually about tax, because I think you're right, that probably is contributing a little bit right now. At a high level, we talked about at company update our consumer deposit growth expectations being low to mid-single digits. I think that is still the belief, and I think we'll be a little bit more confident in that, as you say, once we get through tax season. Maybe we'll know a little bit more next quarter.

Speaker #3: Well, I think 'air pocket' is a little bit of a strong word, but fair enough. I recognize the dynamic that you're describing.

Speaker #3: And I think it's a little bit too early to sort of say, like, yay, like we're back with, like, super robust consumer deposit growth, partially because of your point actually about taxes.

Speaker #3: I think you're right . That probably is contributing a little bit right now . But you know , at a high level , we talked about a company update , our consumer deposit growth expectations being low to mid single digits .

Speaker #3: And I think that is still the belief. And I think we'll be a little bit more confident in that, as you say, once we get through tax season.

Speaker #3: So maybe we'll know a little bit more next quarter . But I will say that , you know , through the lens of like net new checking accounts where I think we said in the PR that we did over 450,000 this quarter .

Jamie Dimon: I will say that through the lens of net new checking accounts, where I think we said in the EPR that we did over 450,000 this quarter. That driver of sort of long-term consumer deposit franchise growth is in place, and it just becomes a question of, at the margin, how yield-seeking flows develop, and what that does to kind of balances per account as we talked about at Company Update. It's the right question. Something we're watching a little bit early, but unchanged expectations.

Jeremy Barnum: I will say that through the lens of net new checking accounts, where I think we said in the EPR that we did over 450,000 this quarter. That driver of sort of long-term consumer deposit franchise growth is in place, and it just becomes a question of, at the margin, how yield-seeking flows develop, and what that does to kind of balances per account as we talked about at Company Update. It's the right question. Something we're watching a little bit early, but unchanged expectations.

Speaker #3: So that driver of sort of long term consumer deposit franchise growth is in place . And it just becomes a question of at the margin , how yield seeking flows develop and what that does to kind of balance as per account .

Speaker #3: As we talked about a company update . So it's the right question , something we're watching a little bit early , but you know , unchanged expectations and some signs , as you point out that the trend might be improving slightly .

Jeremy Barnum: Signs as you point out that the trends might be improving slightly. Just to complete the picture on the wholesale side, as you'll recall, last year was an exceptionally strong year for wholesale deposit growth. Our expectations for this year were a little bit more modest. Actually, the year's starting out pretty well. Some of the typical year-end seasonal increases that we tend to see roll off have not quite rolled off to the extent that we would have expected. I still think the core view is for significantly less robust growth than last year. From a core franchise perspective, things feel pretty good there.

Speaker #3: And then, just to complete the picture on the wholesale side, as you'll recall, last year was an exceptionally strong year for wholesale deposit growth.

Speaker #3: So our expectations for this year were a little bit more modest. Actually, the year is starting out pretty well. Some of the typical year-end seasonal increases that we tend to see roll off have not quite rolled off to the extent that we would have expected.

Speaker #3: So , you know , I still think the core view is for significantly less robust growth than last year . But from a core franchise perspective , things feel pretty good .

Speaker #8: There .

Jamie Dimon: All right. Thank you.

Mike Mayo: All right. Thank you.

Speaker #10: All right . Thank you

Jeremy Barnum: Thanks, Mike.

Operator 2: Thank you. Thank you. Next, we will go to the line of Gerard Cassidy with RBC Capital Markets. Your line is open.

Operator: Thank you. Thank you. Next, we will go to the line of Gerard Cassidy with RBC Capital Markets. Your line is open.

Speaker #8: Thanks, Mike. Thank you.

Speaker #2: Thank you . Next we will go to the line of Gerard Cassidy , RBC Capital Markets . Your line is open .

Gerard Cassidy: Hi, Jeremy. Hi, Jamie. Jeremy, obviously Q1, the expense levels were a little elevated relative to the full-year guide, if you annualize it out, of course. Can you give us some color that how are you going to bring down the following three quarters to be able to hit the year-end guide that you gave us at about $105 billion?

Speaker #11: Hi , Jeremy . Hi , Jamie . Jeremy , obviously , the first quarter of the expense levels were a little elevated . Relative to the full year guide .

Speaker #11: If you annualize that out , of course . Can you give us some color ? That how are you going to bring down the following three quarters to be able to hit the year end guide that you gave us at about 105 billion .

Jeremy Barnum: Yeah. I would somewhat discourage you from annualizing quarterly expense run rates because there's a lot of seasonality in the volume and revenue-related component of that as a function of the seasonality of the markets revenue in particular. I think, in reality, as you well know, Gerard, that's kind of not how we manage the company, meaning I don't think you meant this obviously, but the implication of your question is that, like, oh, the numbers are a bit high in Q1. Let's run around and find some expenses to cut in order to meet our guidance. That's kind of not how we do things. We just manage the expenses holistically every day of the week.

Speaker #3: Yeah. So I would somewhat discourage you from annualizing quarterly expense run rates, because there's a lot of seasonality, and the volume and revenue-related component of that as a function of the seasonality of the market's revenue, in particular.

Speaker #3: But I think , and I think , you know , in reality , as you well know , Gerard , that's kind of like not how we manage the company , meaning I don't think you meant that you meant this , obviously , but the implication of your question is that like , oh , the numbers are a bit high in the first quarter .

Speaker #3: Let's run around and find some expenses to cut in order to meet our guidance. And that's kind of, like, not how we do things.

Speaker #3: Like we just manage the expenses holistically every day of the week . But at a high level , I think you're actually getting at something important , which is that when you consider the exceptionally strong performance of the markets in banking business this quarter , you actually might have otherwise expected us to revise up the full year expense guidance because realistically , I think no one could have .

Jeremy Barnum: At a high level, I think you're actually getting at something important, which is that when you consider the exceptionally strong performance of the markets and banking business this quarter, you actually might have otherwise expected us to revise up the full-year expense guidance because realistically, I think it's impossible to imagine that we would have budgeted the level of performance that we saw this quarter in markets and banking.

Speaker #3: It's implausible to imagine that we would have budgeted the level of performance that we saw this quarter in Markets, in Banking, and that's

Jamie Dimon: No.

Jeremy Barnum: Yeah. I'm almost done.

Jamie Dimon: No, but I'm saying some of it's expected to be quite good.

Speaker #5: No .

Speaker #3: I'm almost done. I'm almost done.

Speaker #5: But I'd say some of us expected it to be quite good. And

Jeremy Barnum: Anyway, my point is.

Jamie Dimon: I hope every quarter's this good. Our expense target would be love to spend more money because we did so well.

Speaker #3: Anyway .

Speaker #5: I hope every quarter is good and that our expense target will be up, to spend more money because we did so well.

Jeremy Barnum: Okay, I still want to make my point, which is that, Gerard, I would discourage you from drawing the conclusion that for the purposes of the whole year, we are going to see the amount of implied internal offset between volume and revenue-related and other expenses that is implied in the failure to revise the guidance this quarter. It's just a little early in the year. Let's see how things play out in the next quarter or so.

Speaker #3: Okay , but I still want to make my point , which is that Gerard , I would discourage you from drawing the conclusion that for the purposes of the full year , we are going to see the amount of implied internal offset between volume and revenue related and other expenses .

Speaker #3: That is implied in the failure to revise the guidance this quarter. It's just a little early in the year, so let's see how things play out in the next quarter or so.

Jamie Dimon: Certainly.

Jeremy Barnum: If volumes and if every quarter was as good as this quarter, we will spend more than $105 for a very good reason.

Speaker #8: So .

Speaker #11: Certainly .

Speaker #5: If volumes and if every quarter was as good as this quarter , we will spend more than 105 for very good reason .

Jamie Dimon: Yeah, no question about that. Yeah, absolutely.

Jeremy Barnum: The $105 is not a promise. It's an outcome of business results.

Speaker #3: Yeah, no question about that. Yeah.

Speaker #5: So 105 is not a promise . It's an outcome of business results .

Gerard Cassidy: Which you've said in the past, Jamie, good expense growth, we all completely understand. As a follow-up question, on digital assets, stablecoin, on the continuum that we're on for adopting these types of new technologies, can you guys give us an update where you see this moving in terms of deposit impact possibly, but more importantly, payments? Obviously, you're a very large payments company. How are you guys assessing it? Thank you.

Speaker #11: Which which you've said in the past . Jamie . Good expense growth . I we all completely understand as a follow up question on digital assets stablecoin on the continuum that we're on for , you .

Speaker #11: Now, adopting these types of new technologies, can you guys give us an update on where you see this moving in terms of deposit impact?

Speaker #11: Possibly , but more importantly , payments , obviously , you're very large payments company . And how are you guys assessing it ? Thank you

Jeremy Barnum: Sure. There's so much to say on the stablecoin front. Obviously, there's a lot of legislative and regulatory stuff going on. I think, Gerard, your question is a little bit more about sort of long-term impact on the payments ecosystem. I guess through that lens, I would actually start with the wholesale business and talk about all of the innovation that we've done in sort of modernizing payments through Kinexys and the way that some of that is starting to play out and giving a lot of our customers kind of exciting new features like programmable money and different hours and the associated token as deposits and all that type of stuff. We're super excited to embrace this type of innovation and be part of it. The question a little bit is how does that relate to our existing franchise?

Speaker #3: Sure . I mean , there's like so much to say on the stablecoin front . Obviously , there's a lot of like legislative and regulatory stuff going on .

Speaker #3: I think . Gerard , your question is a little bit more about sort of long term impact on the payments ecosystem . So I guess through that lens , I would actually start with the wholesale business and talk about all of the innovation that we've done in sort of modernizing payments through Conexus and the way that some of that is starting to play out and giving a lot of our customers kind of exciting new features like programmable money and different hours .

Speaker #3: And the associated , you know , tokenized deposits and all that type of stuff . So we're super excited to embrace this type of innovation and be part of it , you know , and the question a little bit is , how does that relate to , to our existing franchise ?

Jeremy Barnum: In the context of wholesale payments, I think it's just part of an overall product offering. I think sometimes people think that you're going to have some stablecoin thing that's going to radically disrupt the existing wholesale payments paradigm. I think that's not quite the right way to look at it, only because wholesale payments is already an incredibly efficient, extremely low-margin business with very sophisticated clients. It's not as if, a little bit to Jamie's earlier comment, it's not like there's one of these your margin is my opportunity type situation in wholesale payments. It's already a very modern, very technologically sophisticated, pretty low-margin business where we're constantly delivering innovation, including with some of these sort of new technologies.

Speaker #3: And in the context of wholesale payments , I think it's just part of an overall product offering . I think sometimes people think that you're going to have some stablecoin thing that's going to like radically disrupt the existing wholesale payments paradigm .

Speaker #3: And I think that's not quite the right way to look at it . Only because wholesale payments is already an incredibly efficient , extremely low margin business with very sophisticated clients .

Speaker #3: And so it's not as if , you know , a little bit to Jamie's earlier comment . It's not like there's one of these like , your margin is my opportunity type situation .

Speaker #3: And wholesale payments . It's already a very modern , very sophisticated , pretty low margin business where we're constantly delivering innovation , including with some of these sort of new technologies on the consumer side , you know , people talk about like , what is the consumer use case for stablecoin ?

Jeremy Barnum: On the consumer side, people talk about what is the consumer use case for stablecoin. One version of it is digital cash, and there's all the obvious KYC implications of that. I think maybe that's where you get a little bit into the legislative and regulatory front where there's some new developments on that whole thing associated with this notion of to what extent is the payment of rewards a proxy for interest? That sort of turns it into, instead of stablecoin being an interesting form of innovation, it's just regulatory arbitrage so that you can run a bank without being subject to the important regulatory protections, both prudentially and for consumers in terms of KYC and stuff like that. We're eager to compete, we're eager to innovate. We're innovating all over the place. We definitely support the certainty that comes from this legislation.

Speaker #3: And , you know , one version of it , it's like digital cash and there's all the obvious , like KYC implications of that .

Speaker #3: And I think maybe that's where you get a little bit into the legislative and regulatory front , where , you know , there's some new developments on that whole thing associated with this notion of like , you know , to what extent is the payment of rewards or proxy for interest and that sort of turns it into instead of stablecoin being an interesting form of innovation , it's just regulatory arbitrage so that you can run a bank without being subject to the important regulatory protections , both prudentially and for consumers in terms of KYC and stuff like that .

Speaker #3: So we're eager to compete . We're eager to innovate , we're innovating all over the place . We definitely support the certainty that comes from this legislation .

Jeremy Barnum: As we get close to some form of finalization there, it's very important that the same product be regulated, same risk be regulated in the same way, that it doesn't become the case that you just create a giant arbitrage backdoor for the prohibition on the payment of interest for stablecoins. We'll see how that plays out.

Speaker #3: But as we get close to some form of finalization , there , it's very important that the same product be regulated , same risk , be regulated in the same way , and that it doesn't become the case that , you know , you just create a giant arbitrage backdoor for the prohibition on the payment of interest for stablecoins .

Jamie Dimon: Gentlemen, as always, thank you.

Gerard Cassidy: Gentlemen, as always, thank you.

Speaker #3: So we'll see how that plays .

Speaker #8: Out .

Speaker #11: Gentlemen , as always , thank .

Jeremy Barnum: Thank you, Gerard.

Speaker #8: You .

Speaker #3: Thank you .

Speaker #8: Gerard

Operator 2: Thank you. Our next question comes from Gerard Cassidy with RBC Capital Markets. Your line is open.

Operator: Thank you. Our next question comes from David Chiaverini with RBC Capital Markets. Your line is open.

Speaker #2: Thank you . Our next question comes from David Chiavarini with RBC Capital Markets . Your line is open

David Chiaverini: Hi. Thanks. Actually with Jefferies, but thanks for taking the question. Wanted to follow up on.

Speaker #12: Hi . Thanks . Actually , with Jeffrey's . But thanks for taking the question . So I wanted to follow up on .

Jeremy Barnum: Welcome to the call.

David Chiaverini: Thank you. Thank you so much. Wanted to follow up on the consumer deposits. Interest-bearing deposit costs were down nicely in the quarter. Could you talk about the opportunity going forward in light of the changes in the forward curve?

Speaker #3: Welcome to the call

Speaker #12: Thank you . Thank you so much . I wanted to follow up on the consumer deposit . So interest bearing deposit costs were down nicely in the quarter .

Speaker #12: Could you talk about the opportunity going forward in light of the changes in the forward curve

Jeremy Barnum: Okay. That's an interesting formulation. I sort of don't actually know the number you're quoting, but I suspect it's just a function of the rate curve.

Speaker #3: Okay . That's an interesting formulation . I sort of don't actually know the number you're quoting , but I suspect it's just a function of the rate curve .

Jamie Dimon: Yeah

Jeremy Barnum: At the tops that came through last year. Go ahead, Jamie.

Jamie Dimon: I would just keep it simple. The margin would be about what it is today, give or take a couple of basis points up or down. There are a lot of factors in there, like what kind of accounts you're opening, tax refunds, and all that kind of stuff. Roughly the same for now.

Speaker #3: And the cuts that came through last year . Go ahead .

Speaker #5: I would just keep it simple. The margin would be about what it is today, give or take a couple of basis points up or down.

Speaker #5: There are a lot of factors in there, like what kind of accounts you're opening, tax refunds, and all that kind of stuff.

Jeremy Barnum: Yeah. I was going to pivot to the broader question, I guess, which you talk about in terms of opportunity. And I think that, as Jamie says, there's just the yield curve flowing through the high beta portions of the deposit franchise, and then there's the low beta portion of the franchise where I wouldn't say there's quote unquote, a lot of opportunity to price down because I think as is well known, the price there is already quite low, but it's in the context of an overall service bundle where a lot of clients with relatively low balances are getting a lot of value in the package. So, I guess I would leave it there.

Speaker #5: So, but roughly the same for now.

Speaker #3: Yeah . I mean , I was going to pivot to the broader question , I guess , which you talk about in terms of opportunity And I think that , you know , there's the as Jamie says , there's just the yield curve flowing through the high beta portions of the deposit franchise .

Speaker #3: And then there's the low beta portion of the franchise where I wouldn't say there's quote unquote , a lot of opportunity to price down because I think as is well known , the price there is already quite low , but it's in the context of an overall service bundle where , you know , a lot of clients with relatively low balances are getting a lot of value in the package .

Speaker #3: So I guess I would .

David Chiaverini: Thanks for that. Shifting over to a follow-up on private credit, there's still a lot of attention on this in the banks. I think the banks are well protected, but can you remind us of the structure of these loans in terms of typical advance rates and embedded credit enhancement that protects your position?

Speaker #8: Leave it there

Speaker #12: Thanks for that . Then shifting over to a follow up on on Private credit . So there's still a lot of attention on this in the banks .

Speaker #12: I think the banks are well protected . But can you remind us of the structure of these loans in terms of typical advance rates and embedded credit enhancement that protects your position

Jamie Dimon: I think you're asking for too much information. They're loans on top of leveraged loans, so you're senior to the actual loans themselves, and each one is different, the loan to value, the triggers on loan to value, and all the things like that. You can probably figure those out or if you look at the disclosures on the BDCs, et cetera.

Speaker #5: I think you're asking for too much information. They are seeing their loans on top of leveraged loans, so you're senior to the actual loans themselves, and each one is different.

Speaker #5: You know , the loan to value the triggers and loan to value and all the things like that . So , but you can probably figure those out are if you look at the disclosures on the BDC , etc.

Jeremy Barnum: Yeah, I do think it's reasonable to remind, I guess, the market of some things that we've said before about this space, right? Yes, each client, each relationship is a slightly different structure. At a high level, as Jamie points out, it's a senior position. The portfolios are well diversified. There are a number of protections that we have, conservative advance rates, good underwriting, sector concentration caps, cash flow trapping mechanisms, et cetera. As we often say, nothing that we do is riskless, but this is a space that we're quite comfortable with as a function of very close scrutiny on the way that we do the business and ensuring that the underwriting is high quality and that we've got a bunch of structural protections in place.

Speaker #3: Yeah , I do think it's reasonable to sort of remind , I guess the market of some things that we've said before about this space , right ?

Speaker #3: So yes , there , you know , each client , each relationship is slightly different structure , but at a high level , as Jamie points out , it's a senior position .

Speaker #3: The portfolios are well diversified . There are a number of protections that we have conservative advance rates , good underwriting sector concentration caps , cash flow trapping mechanisms , etc.

Speaker #3: , etc. . So as we often say , nothing that we do is riskless , but this is a space that we're quite comfortable with as a function of very close scrutiny on the way that we do the business and ensuring that the underwriting is high quality and that we've got a bunch of structural protection

Jamie Dimon: The BDCs have statutory rules that they can't exceed in terms of loans at the parent, which is sometimes one and sometimes a little bit more than that.

Speaker #5: And the BDCs have statutory rules that they can't exceed in terms of loan to loans at the parent , which is sometimes one and sometimes a little bit more than .

David Chiaverini: Very helpful. Thank you.

Speaker #8: That .

Speaker #12: Very helpful . Thank you

Jeremy Barnum: Thanks, David. Welcome to the call again.

Speaker #3: Thanks , David . Welcome to the call .

Operator 2: Thank you. Our next question comes from Ebrahim Poonawala with Bank of America. Your line is open.

Operator: Thank you. Our next question comes from Ebrahim Poonawala with Bank of America. Your line is open.

Speaker #8: Again

Speaker #2: Thank you . Our next question comes from Ibrahim Poonawala with Bank of America . Your line is open

Ebrahim Poonawala: Hey, good morning. I guess just one question on AI, one on the risk side, one on the opportunity side. On the risks, maybe Jamie or Jeremy, if you can just give us a sense of, it's very hard for investors and for us from the outside to handicap cyber risk. We saw the headlines last week around LLM-enabled cyber risks being discussed in DC. Is this a different level of risks, and how would you characterize the preparedness of the banking system to handle this if something were to happen and we see headlines? I'm just wondering what would be the implications of that as we think about just systemic risks, et cetera.

Speaker #13: Hey , good morning . I guess just one question on AI , one on the risk side , one on the opportunity side , on the risks .

Speaker #13: Maybe Jamie or Jeremy , if you can just give us a sense of it's very hard for investors and for us from the outside to handicap cyber risk , we saw the headlines last week around LLM enabled cyber risks being discussed in D.C.

Speaker #13: , like , is this a different level of risks ? And how would you characterize the preparedness of the banking system to handle this If something were to happen ?

Speaker #13: And we see headlines, I'm just wondering, what would be the implications of that as we think about just systemic risks, etc.

Jamie Dimon: We've been talking about cyber risk for a long time. In fact, I think I said in the Chairman's letter, it's our largest risk. I think every industry is different. In context, I think JPMorgan is very well protected. We spend a lot of money. We've got top experts. We're in constant contact with the government. We're constantly updating things. AI's made it worse. It's made it harder. Of course, we read about Mythos, which we're testing now and looking at, and it does create additional vulnerabilities. Maybe down the road, better ways to strengthen yourself, too. The cyber risk isn't isolated to banks. It's like you can look at almost any industry, and also banks, of course, are attached to exchanges and all these other things that create other layers of risk, which we work with a lot of people to protect themselves.

Speaker #8: So .

Speaker #5: Cyber , you know , we've been talking about cyber risk for a long time . In fact , I think I said in the chairman's letter , it's our largest risk .

Speaker #5: So I think every , every industry is different . So in context , I think JP Morgan's very well protected . We spend a lot of money .

Speaker #5: We've got top experts . We're in constant contact with the government . We're constantly updating things . And I and but AI has made it worse .

Speaker #5: It's made it harder . And of course , we read about mythos , which we're testing now . And looking at it does create , you know , additional vulnerabilities .

Speaker #5: And maybe down the road, you know, better ways to strengthen yourself too. But the cyber risk isn't isolated to banks.

Speaker #5: You know , it's like you can look at almost any industry and also banks , of course , are attached to exchanges and all these other things that create other layers of risk , which , you know , we work with a lot of people to protect themselves .

Jamie Dimon: It is a complex one. It's a full-time job, and we're doing it all the time. While we're trying to get the benefits of AI, we also are very cognizant of the risk of cyber. I think the government's aware of it, too. Remember, you have cyber criminals, you have cyber states, you have cyber everywhere, and that's why you have to be quite careful. I'd say the banks, in total, are rather well protected. That doesn't mean everything that banks rely on is that well protected.

Speaker #5: So this is a complex one . It's a full time job and we're doing it all the time . And while we're trying to get the benefits of AI , we also are very cognizant of the risk of cyber .

Speaker #5: I think the government is aware of it too . And remember , you have cyber criminals , you have cyber states , you have cyber everywhere .

Speaker #5: And that's why you have to be quite careful. So I say the banks in total are rather well protected. That doesn't mean everything the banks rely on is that well protected.

Jeremy Barnum: Yeah. I think there's one just minor extension of what Jamie said that is worth pointing out, which is, obviously he's specifically been talking about the importance of being prepared for cyber risk for many years. I think even more recently, even before this sort of latest set of headlines around the latest Anthropic models, there's been a clear understanding that AI, and generative AI in particular, brings both risks and opportunities from the cyber risk management perspective. It's not like this is the first time that anyone's thought about the way in which these more recent generative AI tools can both make it easier to find vulnerabilities, but then also potentially be deployed by bad actors in attack mode.

Speaker #3: Yeah . And I think there's one just minor extension of what Jamie said that it's worth pointing out , which is , you know , obviously we've been he's specifically been talking about the importance of being prepared for cyber risk for many , many , many years .

Speaker #3: But I think even more recently , even before this latest set of headlines around the latest anthropic models , there's been a clear understanding that AI and generative AI , in particular , brings both risks and opportunities from the cyber risk management perspective .

Speaker #3: So, it's not like this is the first time that anyone's thought about the way in which these more recent generative AI tools can both make it easier to find vulnerabilities, but then also potentially be deployed by bad actors in attack mode.

Jeremy Barnum: So obviously now you've got an even higher level of attention as a result of the apparently much greater capabilities of the latest models, but that is still happening on a continuum that we've been engaged with for really quite a long time.

Speaker #3: So obviously now you've got an even higher level of attention as a result of the apparently much greater capabilities of the latest models .

Speaker #3: But that is still happening on a continuum that we've been engaged with for really quite a long .

Jamie Dimon: Yeah. And if you're on the phone, I think it's also important to look at a lot of it is hygiene. Is your new software being tested before it goes in place? Did you ask them to do certain things to protect the company? How do you protect your data? How do you protect your networks, your routers, your hardware, changing your passcodes? I mean, a lot of it is just doing all those things right can dramatically reduce the risk. And you've seen a lot of banks, they haven't had some of those risks like ransomware and things like that, at least not that I know of.

Speaker #8: Time .

Speaker #5: And it's everywhere in the phone . I think it's also important to look at . A lot of it is hygiene , you know , is your new software being tested before it goes in place ?

Speaker #5: Did you ask them to do certain things to protect their company ? How do you protect your data ? How do you protect your networks , your routers , your hardware , changing your passcodes ?

Speaker #5: I mean , a lot is just doing all those things right . You know , dramatically reduce the risk . And , and you've seen a lot of banks , they haven't had some of those risks like ransomware and things like that , or at least not that I know .

Jeremy Barnum: Yeah. Knock on wood.

Speaker #8: Of . Yeah .

Ebrahim Poonawala: No, that is helpful. Thank you, because I think it's something that investors struggle with. On the opportunity side, I think what it feels like, the productivity boost, which for us translates into what the long-term efficiency ratio could be, could be meaningful from AI deployment, just given the speed at which the technology is evolving. Maybe talk to that. Also, does it create new business opportunities where maybe it's extending the perimeter of J.P. Morgan's business into new things that were harder to do, and are now easier to sort of put together and grow as a business given AI-driven technologies?

Speaker #13: And on .

Speaker #8: The

Speaker #13: No , that was helpful . Thank you . Because I think it's something that investors struggle with on the opportunity side . I think what it feels like , the productivity boost , which for us translates into what the long term efficiency ratio could be , could be meaningful from AI deployment , just given the speed at which the technology is evolving .

Speaker #13: Maybe talk to that . And also does it create new business opportunities where maybe it's extending the perimeter of J.P. Morgan's business into new things that were harder to do and are now easier to sort of put together and grow .

Speaker #13: And as a business , given AI driven technologies .

Jamie Dimon: Yeah. On the first question, I think it's a bad idea to think you're gonna deploy AI, improve your efficiency ratio, because in a competitive world, I'm gonna do it, everyone else is gonna do it, and the benefits will be passed on to the marketplace. It's not like you're entitled to have your ROE go to 50%, and that'll stay there because you do it better than everybody else. You may get a head start. You want a head start. I think that's just not a rational thing, that somehow that will be the ultimate outcome. The second question, absolutely, it creates opportunities because you just take our consumer business. It's true in all businesses.

Speaker #5: So on the first question , I think it's a bad idea to think that you're going to deploy AI and improve your efficiency ratio , because in the competitive world , I'm going to do it .

Speaker #5: Everyone else is going to do it, and the benefits will be passed on to the marketplace. It's not like you're entitled to have your ROE go to 50%, and that'll stay there because you do it better than everybody else.

Speaker #5: You may get a head start . You want a head start , but I just don't . I think that's just not a rational thing that somehow that will be the ultimate outcome .

Speaker #5: But the second question , absolutely , it creates opportunities because , you know , if you look at and you just take our consumer business , it's true in all businesses , but just take the consumer business with the data you have .

Jamie Dimon: Just take the consumer business with the data you have, and now we call it Connected Commerce, where you do travel, and offers, and all of these various things that people want. You can use your relationship with the client, the data you have, to make the client happier. We do a lot to reduce risk, and fraud, and scams by using AI. We do a lot better job of prospecting. We offer AI services to clients, et cetera. It will enhance a lot of things you can do directly, and it will create more adjacencies, in my opinion, if you can use it quickly and wisely.

Speaker #5: And now we call it, you know, connected commerce. We could do travel and offers and all of these various things that people want.

Speaker #5: So you can use your relationship with the client , the data you have to make , the client happier . We , we do a lot to reduce risk and fraud and scams by using AI .

Speaker #5: We do a lot better job on prospecting . We offer AI services to clients , etc. so it will enhance a lot of things you can do directly and it will create more adjacency .

Speaker #5: In my opinion, if you can use it quickly and wisely.

Ebrahim Poonawala: Got it. Thank you both.

Speaker #13: Thank you both

Operator 2: Thank you. Our next question comes from Matt O'Connor with Deutsche Bank. Your line is open.

Operator: Thank you. Our next question comes from Matt O'Connor with Deutsche Bank. Your line is open.

Speaker #2: Thank you . Our next question comes from Matt O'Connor with Deutsche Bank . Your line is open .

Matt O'Connor: Hi. I wanted to start with a big picture question on trading. It's been amazingly strong this quarter, the last few years. Really, no matter whether markets are good or bad, we've had shocks in commodities this quarter, rates, credit, equities. It's not just you and others kind of managing well, but it does seem like the client base is also managing it very well. Just wondering if you have any thoughts on that, on why it's been so consistently strong across a variety of environments?

Speaker #10: Hi . I wanted to start with a big picture question on trading . It's been amazingly strong this quarter the last few years really , of whether markets are good or bad .

Speaker #10: We've had shocks in commodities this quarter. You know, rates, credit, equities. And it's not just you; you and others are kind of managing well.

Speaker #10: But it does seem like the client base is also managing it very well . And just wondering if you have any thoughts on that , on why it's been so consistently strong or twice a variety of environments .

Jamie Dimon: Yeah. Just to put it in the big picture, first of all, our folks do an excellent job. If you meet with them, you'd be very impressed with their knowledge, their brainpower. We buy and sell almost $4 trillion a day. You make a little bit each time you buy and sell, and then you have to manage the exposure to the risk. They do a great job in that. Every now and then you're on the wrong side of something, a credit, a commodity, or rate side or something like that, and you see that. To me, that's kind of the cost of doing business. That's like a retailer having inventory that they can't sell. The real question is, do you serve your clients every day with great products, great service, and great execution? The answer is yes.

Speaker #5: Yeah . So , you know , just to put it in the big picture , folks do an excellent job , you know , and if you meet with them , you'd be very impressed with their knowledge , their brainpower .

Speaker #5: And , you know , and we buy and sell almost $4 trillion a .

Speaker #8: Day

Speaker #5: And you make a little bit each time you buy and sell. And then you have to manage the exposures and the risk.

Speaker #5: So they do a great job in that . Every now and then you're on the wrong side of something . A credit or commodity or rate rate side or something like that .

Speaker #5: And , and you see that . But to me , that's , that's kind of the cost of doing business . That's like a retailer having inventory that they can't sell .

Speaker #5: The real question is , do you serve your clients every day ? You know , with great products and great service and great execution , you know , and the answer is yes .

Jamie Dimon: That's where the real business is. What you see today is much more volume and volatility, which generally helps because it makes spreads a little bit wider, all things being equal. There will be times where you're gonna be sitting here and we're gonna say that volatility killed us, if you're on the wrong side of something. In general, you're serving huge investors around the world who have $350 trillion with so much products and services. That's the business of trading. I remind people, it's not that different when you go to a Home Depot. They have inventory. They put it in, they put it out, they mark it up, they mark it down. They don't call it trading, but there's that element of risk management there, fabulous people doing a great job for clients, very conscious of the risk they take.

Speaker #5: And that's where the real business is . And what you see today is much more volume and volatility , which generally helps because it makes spreads a little bit wider , all things being equal , there will be times where you're going to be sitting here and we're going to say that volatility killed .

Speaker #8: Us .

Speaker #5: You were on the wrong side of something . But in general you're serving huge investors around the world who have $350 trillion . You know , with so much products and services that that's the business of trading .

Speaker #5: And I remind people , it's not that different . You know , when you go to Home Depot , they have inventory , they put it in , they put it out , they mark it up , they mark it down .

Speaker #5: They don't call it trading , but there's that element of risk management . They're so but you know , fabulous people , you know , doing a great job for clients , you know , very conscious of the risk they take .

Jamie Dimon: Sometimes we take a risk that we were wrong, and we're okay with that. We never panic over that. You've never seen us say my God, we were on the wrong side of this trade. No, because we're there serving clients. Very often, you're on the wrong side of a trade because the client wants to sell and you're not really dying to buy, but you do it anyway to serve a client. It's a business. It's a very good business.

Speaker #5: Sometimes they take a risk that we, you know, we were wrong and we're okay with that. We never panic over that.

Speaker #5: We don't you've never seen a say , my God , we were on the wrong side of this trade . No , because we're they're serving clients .

Speaker #5: And very often you're on the wrong side of the trade because the client wants to sell and you're not really dying to buy, but you do it anyway to serve a client.

Speaker #5: And so it's a business . It's a very good business .

Jeremy Barnum: Yeah. Just one minor extension of that that I think supports the larger point is the thing we've said a couple of times now, which is, yeah, the revenues have been great, and the performance is very good. We're deploying a ton of capital.

Speaker #8: Yeah .

Speaker #3: And just one minor extension of that that I think supports the larger point is the thing we've said a couple times now , which is , yeah , the revenues have been great .

Speaker #3: And the performance is very good . We're deploying a ton of capital in this business actually , and a lot more over the last few years .

Jeremy Barnum: Actually, and a lot more over the last few years, I think the returns that we're getting are good there. They're actually below the 17% for the company as a whole. That's fine, and we're serving clients, and it's much better than alternative uses of capital. I think the important thing to understand is that it's not as if you're getting giant amounts of revenue growth with the same capital base in ways that you might think are unsustainable. Part of what's going on here is that we're deploying more capital and getting healthy returns on it.

Speaker #3: And I think the returns that we're getting are good . They're they're actually below the 17% for the company as a whole . That's fine .

Speaker #3: And we're serving clients, and it's much better than alternative uses of capital. But I think the important thing to understand is that it's not as if you're getting giant amounts of revenue growth with the same capital base, in ways that you might think are unsustainable.

Speaker #3: Part of what's going on here is that we're deploying more capital and getting healthy returns.

Matt O'Connor: That's helpful. I guess a good segue into kind of a broader capital management question. Obviously, a lot of comments on the reproposals. As we think about kind of capital management going forward, any updated thoughts on, you still have a big buffer, obviously, on today's required levels three years from now or two years from now? You generate a ton of capital, obviously very solid buybacks this quarter. You grew organically, as you mentioned, but just any updated thoughts on how to think about capital allocation going forward? Thank you.

Speaker #8: In .

Speaker #10: That's helpful . And then I guess a good segue into kind of a broader capital management question . Obviously , a lot of comments on the proposals and but as we think about kind of capital management going forward , any updated thoughts on you still have a big buffer , obviously , on today's required levels , three years from now or two years from now , generate a ton of capital .

Speaker #10: You know , obviously very solid buybacks . This quarter . You know , you grew organically , as you mentioned , but just any updated thoughts on how to think about capital allocation going forward ?

Jamie Dimon: Yeah, obviously we have a lot of excess capital. Today we measure around $40 billion. Obviously that can change depending on ultimate rules and regulations. We prefer to deploy the capital serving clients. The way you see us serving clients, we have more bankers, innovation economy, more global banking, doing commercial banking overseas, opening countries, opening payment systems, opening branches. That is ultimately what deploys capital over time, building the client base. It doesn't happen overnight. The outcome isn't deploy capital. I mean, the goal isn't deploy capital. It's build wonderful businesses that use capital intelligently over time, developing mainly with a client focus on it.

Speaker #10: Thank you .

Speaker #5: Yeah . so we obviously have a lot of excess capital , which today we measure around 40 billion . Obviously , that can change depending on ultimate rules and regulations .

Speaker #5: I think . And we prefer to deploy the capital serving clients . And the way we you see us serving clients , we have more bankers , innovation , economy , more global banking , doing commercial banking overseas opening countries , opening payment systems , opening branches that is ultimately what deploys capital at the time , building the client base .

Speaker #5: And it doesn't happen overnight . The outcome isn't to deploy capital . I mean , the goal isn't to capital build , you know , wonderful businesses that use capital intelligent over time , developing , you know , with a client , mainly with a client , focus on it and I think when I look at the world today , if you look at the world that is so big and so complex , and the capital needs , you know , when you look at the small , you know , we're going to , we're one of the biggest small business bankers out there .

Jamie Dimon: I think when I look at the world today, if you look at the world that is so big and so complex and the capital needs, we're one of the biggest small business bankers out there, but look at the capital needs of countries today. The remilitarization of the world, the infrastructure that people need, I think there'd be huge capital needs of companies, huge mergers. I mean, some of these companies, when I look at them, we're not big enough to serve them anymore. We think there will be more opportunity to serve large clients in the ways that they need it over time. That could be M&A, it could be countries, it could be helping them build the infrastructure they need. That'll happen over time. We're not in a rush.

Speaker #5: But look at the capital needs of countries today. You know, the remilitarization of the world, the infrastructure that people need.

Speaker #5: I think there'd be huge capital needs of companies, a huge amount of mergers. I mean, some of these companies, when I look at them, we're not big enough to serve them anymore.

Speaker #5: And so we think there will be more opportunity to serve , you know , large clients in ways that they need it over time .

Speaker #5: And that could be M&A . It could be countries , it could be , you know , helping them build the infrastructure they need .

Speaker #5: So and that'll happen over time . We're not in a rush . You know , our preferred way of using capital is not buying back stock today .

Jamie Dimon: Our preferred way of using capital is not buying back stock today. We're doing it, fair market value and all that, but I'd rather buy back stock when we think it's a real discount, and the ongoing shareholder gets the benefit of buying it cheap.

Speaker #5: We're doing it . You know fair market value and all that . But I'd rather buy back stock . We think it's a real discount .

Speaker #5: And the ongoing shareholder gets the benefit of buying it .

Speaker #8: Cheap

Matt O'Connor: Okay, thank you very much.

Jamie Dimon: Matter of fact, I want to remove that little thing that says cash returned to investors, which is dividends to stock buyback. I don't particularly like that because I think it puts you in an artificial position thinking that's always a good thing when it's not.

Speaker #10: Okay . Thank you very much .

Speaker #5: I want to remove that little thing that says cash returned to investors , which is dividends and stock buyback . I don't particularly like that because I think it puts you in artificial position , thinking that's always a good thing when it's not

Jeremy Barnum: Okay, we'll add that to the list. Next question.

Speaker #3: Okay. Well, that's the...

Speaker #8: List .

Operator 2: Thank you. Our next question comes from Glenn Schorr with Evercore ISI. Your line is open.

Operator: Thank you. Our next question comes from Glenn Schorr with Evercore ISI. Your line is open.

Speaker #3: Next question .

Speaker #2: Thank you . Our next question comes from Glenn Schorr with Evercore ISI . Your line is open .

Glenn Schorr: Hi. Thanks very much. That last comment leads into my question. I'll just merge my question and follow-up together because it's easier. Those things that you just mentioned, Jamie, on the big capital needs, some of those are very long duration. I'm curious on how much you think of that plays into a long duration private markets balance sheet, or can big public banks finance that? You mentioned in your letter the market might be a little too relaxed about higher for longer rates. I'm curious how you see that playing into all these direct lending BB and B credits that need to get refinanced. While we're at it, the follow-up is, can you size your private credit exposure? Sorry to smush that all together, but I'll end it on that.

Speaker #14: Hi . Thanks very much . That last comment leads into my question . I'll just merge my question and follow up together because it's easier .

Speaker #14: So those things that you just mentioned , Jamie , on the big capital needs , some of those are very long duration . I'm curious on how , how much you think of .

Speaker #8: That

Speaker #14: Plays into a long duration private markets balance sheet or can , can big public banks finance that . And so you mentioned in your letter the market might be a little too relaxed about higher for longer rates .

Speaker #14: And I'm curious how you see that playing into all these direct lending double and single B credits that need to get refinanced . And while we're at it , the follow up is , can you size your private credit exposure ?

Speaker #14: So sorry to smush that all together . but I'll end it on that .

Jeremy Barnum: Jamie, sorry, if you don't mind, let me just answer Glenn's second question first because I think it would be useful for the market to have the size number out there.

Speaker #3: So , Jamie , sorry if you don't mind , let me just answer Glenn's second question first , because I think it would be useful for the market to have the size number out there .

Jamie Dimon: Okay.

Jeremy Barnum: I'll do that quickly, and then if you want to take the first part of the question. Glenn, let me just frame this in context because I think the question of private market exposure and the definition of that, it means, as you know, a lot of different things to a lot of different people. Let me just quickly run through. You'll remember last quarter we did a walk in the context of NBFI from the $330 in the Call Report to the $160 that we consider core NBFI exposure, which we defined in that context. I won't go through that again. Inside of that $160, there's about $50 that we would call private credit, and it's essentially the portion of that $160 of NBFI which involves leveraged loan investors.

Speaker #3: So I'll do that quickly and then . And then if you want to take the first part of the question . So Glenn , let me just frame this in context because I think the question of private market exposure and the definition of that , it means , you know , a lot of different things , a lot of different people .

Speaker #3: So let me just quickly run through , you'll remember last quarter , we did a walk in the context of Nv5 from the 330 and the call report to the 160 that we consider Core and BFI exposure , which we defined in that context .

Speaker #3: I won't go through that again . So inside of that 160 , there's about 50 that we would call private credit . And it's essentially the portion of that 160 of BFI , which involves leveraged loan investors .

Jeremy Barnum: That's some of the stuff that we've been talking about on this call in terms of back leverage and BDC lending that has all these characteristics in terms of underwriting, diversification, cash flow trapping, et cetera, which is why we're broadly comfortable with it. I just thought it would be worth sizing that in that context. There are obviously other pieces of that, like direct lending or subscription lines that are variously in or out of various different measures and that you could consider in a broader definition. Our sense is that the thing that people are interested in is this kind of leverage loan, back leverage type stuff, and that's about $60 billion for us. With that, I'll hand it back to Jamie for H1.

Speaker #3: So that's some of the stuff that we've been talking about on this call in terms of back leverage and VC lending that has all these characteristics in terms of underwriting, diversification, cash flow tracking, etc.

Speaker #3: , which is why we're broadly comfortable with it . So I just thought it would be worth sizing that in that context . There are obviously other pieces of that , like direct lending or subscription lines that are variously in or out of various different measures , and that you could consider like in a broader definition , but our sense is that the thing that people are interested in is this kind of like leveraged loan back , leveraged type stuff , and that's about 50 billion for us .

Speaker #3: So with that , I'll hand it back to Jimmy for .

Jamie Dimon: Yeah. The way I look at it, so banks aren't going to warehouse very long-dated stuff in their balance sheet. When you have investment grade or even large non-investment grade, private markets and public markets are going to come together. People have to make markets in those things, do research in those things. I think it's going to be harder for private credit to do, not all of them, but to do large investment grade stuff, though they've done it. Like I said, they have to compete with us on that, and we're willing to do it too. We always take the customer deal. If they want to do a large direct lending investment grade deal, we will present that side by side with a bank syndicated loan or something different.

Speaker #5: Yeah . So the way , the way I look at it , so banks aren't going to warehouse very long dated stuff in their balance sheet , but you know , when you have investment grade or even large non-investment grade , you know , private markets and public markets are going to come together .

Speaker #5: There's going to be people have to make markets and those things do research on those things . I think it's going to be harder for private credit to do .

Speaker #5: Not all of them , you know , but to do large investment grade stuff , though they've done it , you know . But like I said , they have to compete with us on that .

Speaker #5: And we're willing to do it too. We always take the customer view. They want to do a large direct lending investment grade deal.

Speaker #5: We will present that side by side with a bank syndicated loan or something different . But I do think you're going to see a lot of creative capital , a lot of creative financing , a lot of institutions out there need long dated assets .

Jamie Dimon: I do think you're going to see a lot of creative capital, a lot of creative financing. A lot of institutions out there need long-dated assets. Think of pension plans and Social Security plans, all these various things like that. Our job is to intermediate, to come with ideas, to turn it over, sometimes put it on the balance sheet. The stuff on the balance sheet will be shorter dated, but it's all opportunity. I think that the requirements of the world are going up fairly dramatically in the infrastructure at large. Almost everything's infrastructure today, utilities and roads and bridges and data centers and GPUs. It's all there, but we're going to do a great job serving clients. We're not worried about that.

Speaker #5: Think of , you know , pension plans and , you know , Social Security plans . All these various things like that . So our job is to intermediate to come up with ideas to , you know , to turn it over .

Speaker #5: You know, sometimes you put on the balance sheet, the stuff in the balance sheet. It can be shorter dated, but it's all opportunity.

Speaker #5: And I think the requirements of the world are going up fairly dramatically in the infrastructure— infrastructure writ large. I mean, almost everything is infrastructure today.

Speaker #5: You know , utilities and roads and bridges and data centers and GPUs and , and so it all it's all there . But we're going to do a great job serving clients and , and so we're not worried about that .

Jamie Dimon: I do think you'll see in certain categories, private markets and public markets come a lot closer in how they look at values and trading and secondary markets, et cetera.

Speaker #5: But I do think you'll see, in certain categories, private markets and public markets come a lot closer in how they look at values and trading and secondary markets, etc.

Operator 2: That concludes your questions, Glenn.

Operator: That concludes your questions, Glenn.

Glenn Schorr: Thanks so much. Yeah, I just, to jump in there, the higher-for-longer part, if that has an impact on some of that single-B, double-B paper that's coming due for refinancing.

Speaker #2: Is that concludes your question .

Speaker #8: Gwen

Speaker #14: Yeah , I just chuck in there . The higher for longer part . And if that has an impact on all some of that single B double B paper that's coming due for refinancing .

Jamie Dimon: Yeah. No, Glenn, that's like a basic risk management where when you look at the world, you got to look at what's going to happen in a recession. I'm not forecasting anything. I'm simply saying, for JPMorgan, we have to be prepared for a recession and that you can have stagflation. You see people mention that we have to be prepared for stagflation. Obviously, if you have stagflation and higher rates for longer and credit spreads gap out, that will put a lot of stress and strain on leveraged companies as they refinance. Those get fixed. Sometimes people put in more capital credits, sometimes reduce their CapEx plans. It's not an immediate disaster overnight, but it would put a lot more stress and strain on people. I pointed out that if there's a credit cycle, I do expect it'll be worse than people think relative to the scenario.

Speaker #5: Yeah . No , that's like a basic risk management where you know , when you look at the world , you got to look at , you know , what's going to happen in recession .

Speaker #5: Not I'm not talking about I'm not forecasting anything . I'm simply saying for JP Morgan , we have to be prepared for a recession .

Speaker #5: And that , you know , you can have stagflation . You know , you see people mentioned that we have to be prepared for stagflation .

Speaker #5: You know , obviously if you have stagflation and higher rates for longer and credit spreads gap out , that will put a lot of stress and strain on leveraged companies as they refinance , you know , and those get fixed .

Speaker #5: Sometimes people put more capital or credit , sometimes reduce their CapEx plans , you know , it's not an immediate disaster overnight , but it would put a lot more stress and strain on people .

Speaker #5: And I pointed out that if there's a credit cycle, I do expect it will be worse than people think relative to the scenario.

Jamie Dimon: It's not a disaster. We're used to credit cycles. We'll be big boys about it. Asset prices go down, credit spreads will go down. People may get a little nervous about some of those things. We don't think it's systemic. That's more, I would put in the category of traditional recessionary behavior.

Speaker #5: It's not a disaster . We used to . Credit cycles will be big boys about it , you know , but asset prices will go down .

Speaker #5: Credit spreads will go down. People may get a little nervous about some of those things. We don't think it's systemic. You know, that's more I would put in the category of traditional recessionary behavior.

Glenn Schorr: All right, thanks for all that, appreciate it.

Speaker #14: All right. Thanks for all that.

Speaker #8: Appreciate it

Operator 2: Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities. Your line is open.

Operator: Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities. Your line is open.

Speaker #2: Thank you. Our next question comes from Jim Mitchell with Seaport Global Securities. Your line is open.

Jim Mitchell: Good morning. Just maybe a quick question on investment banking. It seems like activity held up pretty well in March. Just wanted to get your thoughts on that. Has there been any pushing out, or any pause on activity levels, and pushing out of the pipeline? Just any thoughts on the pipeline and how you're looking in the near to intermediate term? Thanks.

Speaker #15: Good morning. Just maybe a quick question on investment banking. It seems like activity held up pretty well in March, but just wanted to get your thoughts on that.

Speaker #15: Has there been any pushing out of any pause on activity levels and pushing out of the pipeline ? Just any thoughts on the pipeline and how you're looking in the near to intermediate term ?

Jeremy Barnum: Sure. Yeah. I think it's true that activity held up well. The other thing that I think is worth noting is that some of the robust result this quarter is the result of actually accelerated timing on M&A deal closure, and some of that was as a result of faster than expected regulatory approval. That's obviously all to the good, but I think it's sort of unrelated one way or the other to overall sentiment. On the question of overall sentiment on the pipeline, I would describe it as resilient, maybe surprisingly resilient, given everything that's going on. I also think the timelines in the Middle East are kind of quite short. There are deadlines or negotiations. I think it's reasonable for people to kind of proceed with their plans, in the hope or maybe expectation that we get relatively quick resolutions.

Speaker #15: Thanks

Speaker #3: Sure . Yeah . I mean , I think it's true that activity held up well , the other thing that I think is worth noting is that , you know , some of the robust results this quarter is the result of actually accelerated timing on M&A deal closure .

Speaker #3: And some of that was as a result of faster than expected regulatory approval . So that's obviously all to the good . But I , I think it's sort of unrelated one way or the other to overall sentiment .

Speaker #3: On the question of overall sentiment and the pipeline , I would describe it as resilient . Maybe surprisingly resilient , given everything that's going on .

Speaker #3: But I also think , you know , the timelines in the release are kind of quite short . There are deadlines are negotiations .

Speaker #3: I think it's reasonable for people to kind of proceed with their plans in the hope , or maybe expectation that we get relatively quick resolutions , but if things start getting derailed , I would be surprised if you didn't see some impact on sentiment and on deal decision making .

Jeremy Barnum: If things start getting derailed, I would be surprised if you didn't see some impact on sentiment and on deal decision-making. For right now, it seems quite resilient.

Speaker #3: But for right now, it seems quite

Jim Mitchell: Okay. Just to follow up on the balance sheet growth in markets, it has been strong, I think up over 20% year-over-year. Were you saying, when you think about the impact of the GSIB surcharge on JPMorgan specifically, does that start to impinge your ability to grow that as much as you want? How is that factoring into your capital decision in the markets business?

Speaker #8: Resilient .

Speaker #15: Okay . And just a follow up on the balance sheet growth in in markets , it has been strong . I think up over 20% year over year .

Speaker #15: Were you saying when you think about the the impact of the Gsib surcharge on JPMorgan specifically , does that start to impinge your ability to to grow that as much as you want ?

Speaker #15: How is that factoring into your capital decision in the markets business?

Jeremy Barnum: I think the short answer is yes, and that's a big part of the reason that we spent.

Speaker #3: I think the short answer is yes . And that's a big part of the reason that we . spent the time that we spent today talking about the problems with the surcharge .

Jim Mitchell: Yeah.

Jeremy Barnum: The time that we spent today talking about the problems with the surcharge, it disproportionately accrues to markets business. It disproportionately accrues to the relatively low risk density type of stuff that the client base really needs and wants these days. That's why we think it's important that regulators think very carefully about what they're actually trying to achieve here.

Jim Mitchell: Yeah.

Speaker #3: You know , it it disproportionately accrues to the markets business . It disproportionately accrues to the relatively low risk density type of stuff that the that the client base really needs and wants these days .

Speaker #3: And that's why we think it's important that regulators think very carefully about what they're actually trying to achieve .

Jamie Dimon: One other thing, we will obviously use our brainpower to do something I don't like doing, which is trying to find a lot of ways to serve our clients properly and reduce the G-SIB charge, which is usually called arbitrage. I'm not sure the outcome is great for the system, but we will find ways to do it.

Speaker #8: Here .

Speaker #5: And one other thing we will obviously use our brain power to do something I don't like doing , which is trying to find a lot of ways to serve our clients properly .

Speaker #5: And reduce the G-SIB charge, which is usually called arbitrage. So I'm not sure the outcome is great for the system, but we will find ways to do.

Jim Mitchell: Okay, great. Thanks.

Speaker #8: It .

Speaker #15: Okay , great . Thanks

Operator 2: Thank you. Our last question comes from Kuen-Pong Ma with China Securities. Your line is open.

Operator: Thank you. Our last question comes from Kunpeng Ma with China Securities. Your line is open.

Speaker #2: Thank you . Our last question comes from Emma with China Securities . Your line is open

Kuen-Pong Ma: Thank you. Good morning. Thank you for taking the time. This is Kuen-Pong of China Securities. I have a quick follow-up on private credit. I totally agree with Jamie that there is no systematic risk at this moment, as long as we assume that every type of CapEx expenditures continue with good yield outlook. It comes down to company-specific questions like, how does JPMorgan ensure its capability of selecting the top-tier projects? How do you ensure you stay with those good guys and stay away from those bad guys? Thank you.

Kunpeng Ma: Thank you. Good morning. Thank you for taking the time. This is Kuen-Pong of China Securities. I have a quick follow-up on private credit. I totally agree with Jamie that there is no systematic risk at this moment, as long as we assume that every type of CapEx expenditures continue with good yield outlook. It comes down to company-specific questions like, how does JPMorgan ensure its capability of selecting the top-tier projects? How do you ensure you stay with those good guys and stay away from those bad guys? Thank you.

Speaker #16: Thank you . Good morning . Thank you for taking my time . This is of China's securities . I have a quick follow up on private credit .

Speaker #16: I totally agree with Jamie that there is no systematic risk at this moment , as long as we assume the every type of capital expenditures continue with good yield outlook .

Speaker #16: So it comes down to company specific questions like how does JP Morgan insure it's capability of of selecting the top tier projects ? How , how , how do you ensure you stay , stay with those , those good guys and stay away from those bad guys ?

Jamie Dimon: Yeah. We are quite disciplined on credit. There are certain things we turn down because we don't like the covenants, the underwriting, or the ability to move assets out of the secured company or something like that. We're perfectly willing to have our balance sheet go down. If in fact, we think credit is getting stretched, you will see us not make loans, not because we don't want to, we're just not willing to meet those terms. That's how we do it. When it comes to most clients, including private credit, we underwrite the company, the loans, the covenants, and all those various things. Credit's a discipline. Like I said, loans or all of them are an outcome of doing good business.

Speaker #8: Thank you .

Speaker #5: Yeah . So we , we are quite disciplined on credit , you know , certain things we turn down because we don't like the covenants , the underwriting or the ability to move assets out of the secured , you know , company or something like that .

Speaker #5: And we're perfectly willing to have our balance sheet go down , you know , if in fact , we think credit is getting stressed , you will see us not make loans , not because we don't want to .

Speaker #5: We're just not willing to meet those terms . And so that's how we do it . We underwrite , you know , when it comes to most clients , including private credit , we underwrite the company , the loans , the covenants , the , the , all those various things .

Speaker #5: And , you know , credits are discipline . You know , like I said , loans , all of them are an outcome of doing good business .

Jamie Dimon: Sometimes if the loan book drops 10% next year, we would be completely fine if we thought the loans that we're walking away from were irresponsible.

Speaker #5: Sometimes, if the loan book drops 10% next year, we would be completely fine—if we thought the loans that we were walking away from were irresponsible.

Operator 2: Does that conclude your questions?

Operator: Does that conclude your questions?

Speaker #2: Does that conclude your question

Kuen-Pong Ma: Thank you, Jamie.

Kunpeng Ma: Thank you, Jamie.

Jamie Dimon: Great. Thank you. Thanks very much. Thanks, everyone. Thanks, everybody.

Speaker #16: Thank you . Thank you .

Speaker #8: Jamie . Great . Thank you .

Speaker #3: Thanks very much. Thanks.

Speaker #8: Everyone .

Speaker #5: Thanks , everybody

Operator 2: Thank you all for participating in today's conference. You may disconnect at this time and have a great rest of your day.

Operator: Thank you all for participating in today's conference. You may disconnect at this time and have a great rest of your day.

Speaker #2: Thank you all for participating in today's conference. You may disconnect at this time, and have a great rest of your day.

Q1 2026 JPMorgan Chase & Co Earnings Call

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