JPMorgan Chase & Co. 2026 Q3 Earnings Call

Thank you very much, and good morning, everyone. The firm delivered net income of $15.3 billion, EPS of $5.57, and an ROTCE of 20%. These results included $658 million of net investment securities losses in corporate. Revenue of $50.9 billion was up 8% year-on-year. Excluding the net investment securities losses, revenue was up 9% year-on-year, largely driven by markets revenue, higher deposit balances, and higher asset management fees in AWM and CCB. Expenses of $27.3 billion were up 12% year-on-year, largely driven by higher volume and revenue-related expense, as well as front office hiring and wage inflation. Credit costs were $2.7 billion, with net charge-offs of $2.2 billion, and a net reserve build of $539 million.

In terms of the balance sheet, we ended the quarter with a standardized CET1 ratio of 13.9%, down 30 basis points versus the prior quarter, as net income was more than offset by OCI losses, higher RWA, and capital distributions. You'll note that we've updated the categories on the RWA walk to make it a bit more useful. This quarter's standardized RWA increase of about $52 billion is predominantly driven by an increase in lending across banking, markets, and AWM, as well as the impact of higher energy prices and increased market volatility. Now moving to our businesses. CCB reported net income of $5.7 billion. Revenue of $21.2 billion was up 9% year-on-year, predominantly driven by higher balances in yield and card, asset management fees, deposit balances, and auto lease income.

A few points to highlight, debit and credit spend grew 10% year-on-year, with continued momentum across spending categories, including gas and travel, supported by consumer demand. Deposit growth of 4% year-on-year was stronger this quarter, as we continued to grow our customer base across consumer and business banking, and we retained our number 1 position in retail deposit share based on FDIC data. Client investment assets crossed $1.4 trillion, up 15% year-on-year, driven by market performance and strong flows. Next, the CIB reported net income of $8.2 billion. Revenue of $22.7 billion was up 14% year-on-year on strong performance across the businesses. IB fees were up 14% year-on-year, reflecting strong performance across products, notably in advisory. While our outlook remains constructive, supported by ongoing client engagement, evolving market conditions have recently slowed activity a bit, so we'll have to see how the quarter develops.

In markets, FICC was down 4% year-on-year, with lower revenues in commodities, rates, and credit, largely offset by higher client flows in currencies and emerging markets. Equities was up 49% year-on-year, with continued outperformance across the franchise, notably in prime and derivatives. Turning to Asset and Wealth Management. AWM reported net income of $1.8 billion with pretax margin of 36%. Revenue of $6.9 billion was up 14% year-on-year, predominantly driven by growth in management fees on higher average market levels and strong net inflows, as well as higher loan balances. Long-term net inflows were $51 billion, largely driven by continued strength in fixed income. AUM of $5.2 trillion was up 13% year-on-year, and client assets of $7.9 trillion were up 15% year-on-year, driven by continued net inflows at higher market levels.

Finally, corporate reported a net loss of $455 million, which included the net investment securities loss, as mentioned earlier, on revenue of $93 million. Turning to the outlook, I am going to update the full year guidance by giving you the fourth quarter. The implied full year numbers are on the page. We expect fourth quarter NII ex markets to be approximately $25.5 billion and fourth quarter total NII to be about $28 billion. As we have done for a couple of years, you will note we gave you a central case for 2027 NII ex markets of approximately $107 billion, which we will refine further next quarter. It is important to remember that this central case is based on a series of assumptions that are obviously highly uncertain, even under the best of circumstances.

On expense, we expect the fourth quarter to be about $27.5 billion, with the implied full year increase reflecting higher volume and revenue-related expense, driven by continued elevated activity levels. Finally, we continue to expect the card net charge-off rate to be approximately 3.2%. With that, we are now happy to take your questions, so let us open the line for Q&A.

I'll start. You want to jump in? Yeah. Okay. On the disruption point, couple of things. There's obviously been a lot of focus on the Smart Cash solution, which I think is a small piece of the overall story. That is live now actually as of the last couple weeks. Very early days, and it remains a targeted pilot type thing. It is interesting to learn some things about what clients care about and sort of see how it works to kind of sell a product like this in the field. So maybe more to come on that in the future. Early days. Interesting so far.

I think the bigger picture here is around there have been a couple of releases of personal agents this quarter, which have really gotten a bunch of attention in the market, and we saw a little bit of a response in bank stocks around those releases. I guess the way we think about that from our perspective is that, on the one hand, it's nothing new, but that doesn't mean that we're complacent about it. So if you think about what is the nature of the competition that comes from these agents, it's really the intersection of two things that we've been talking about for a long time. One is yield-seeking flows. Obviously we deal today and have dealt with all the various rate cycles with a lot of competition from yield-seeking flows.

Our strategy remains focusing on primary bank share, not chasing every dollar of yield-seeking money. So that doesn't mean that competitive pressure isn't real. It just means it's not particularly new. The other piece is competition from fintechs who are innovating and providing great customer experiences, and we've also been talking about that for a long time, and the criticality of ensuring that we have parity with them, and that we're leaning in enough to make sure that we're giving people the experiences that they want through all the various channels, including digital. In that sense, the kind of agentic personal agents, whatever stuff, it's just the intersection of those two things, and it's not new. As I said, that doesn't mean we're complacent about it.

We're spending a lot of time on it, and it's going to be interesting to see how the space develops and what we ourselves offer there at some point. But when you take a really big step back from a competitive position, I think we really like our hand in no small part because of the sort of multiple decades of investment in the branch network, the value proposition, and not least trust that our customers have in us.

I would say internally we use agents to do good things here, and we're going to continue to do that. We'll use it for customers. But our focus will always be do a great job for customers. We're not against agents or for agents, something like that. They're tools. You use them for customers. There is a defensive side, which is you got to make sure our customers aren't hurt by it. That is of concern. But think of that as an agentic AI concern, which is heightened because you don't want rogue agents, and there could be thousands of them. We've always been literally on the side of the client. If people are using them, they should understand the risk. There's a liability transfer. They should understand there's a liability transfer. If data is being misused, they should understand it's being misused.