JP MORGAN CHASE(US:JPM)2025-10-14 13:30Financial Data and Key Metrics Changes - The company reported a net income of $14.4 billion and an EPS of $5.07, with a ROTC of 20% [2] - Revenue reached $47.1 billion, up 9% year on year, driven by higher markets revenue and increased fees across asset management, investment banking, and payments [2] - Expenses totaled $24.3 billion, an 8% increase year on year, attributed to higher volume and revenue-related expenses [3] - The CET1 ratio decreased to 14.8%, down 30 basis points from the previous quarter [3] Business Line Data and Key Metrics Changes - Consumer & Community Banking (CCB) reported net income of $5 billion, with revenue of $19.5 billion, up 9% year on year, primarily due to higher NII from increased revolving balances [4] - Corporate & Investment Bank (CIB) net income was $6.9 billion, with revenue of $19.9 billion, a 17% increase year on year, driven by higher revenues in markets, payments, investment banking, and security services [5] - Asset & Wealth Management (AWM) reported net income of $1.7 billion, with record revenue of $6.1 billion, up 12% year on year, driven by growth in management fees and higher brokerage activity [6] Market Data and Key Metrics Changes - Long-term net inflows for AWM were $72 billion for the quarter, with assets under management reaching $4.6 trillion, up 18% year on year [6] - Client assets increased to $6.8 trillion, up 20% year on year, driven by continued net inflows and higher market levels [6] Company Strategy and Development Direction - The company aims to maintain its leading position in retail deposit share and is focused on new account acquisitions, particularly in the Sapphire portfolio [4] - The outlook for the fourth quarter includes expectations for NII ex markets to be approximately $23.5 billion and total NII to be about $25 billion [7] - The company plans to provide a formal outlook for 2026 during the fourth quarter earnings call, indicating a preliminary view of about $95 billion for NII ex markets [8] Management's Comments on Operating Environment and Future Outlook - Management noted that while the consumer remains resilient, there are risks associated with a potentially softening labor market [4][36] - The company is cautious about the credit cycle, acknowledging that while current consumer credit performance is stable, there are risks of deterioration if the labor market weakens [36] - Management emphasized the importance of expense discipline and the potential for AI-driven productivity gains, while also recognizing the challenges of labor cost inflation [39][78] Other Important Information - The company is focused on utilizing excess capital effectively, with plans to support growth in critical industries while considering dividend hikes [30] - Management highlighted the importance of maintaining a conservative approach to lending, particularly in the non-bank financial institution (NBFI) sector, while acknowledging the risks involved [50][51] Q&A Session Summary Question: Retail deposit growth expectations - Management updated expectations for retail deposit growth, indicating a potential 3% growth in Q4 and 6% for 2026, but noted that current balances per account are lower than previously expected due to various macroeconomic factors [11][13][15] Question: Credit fundamentals and demand in lending - Management discussed the demand for lending, noting healthy deal flow and acquisition finance activity, while also addressing concerns about credit fundamentals in public versus private markets [20][22][24] Question: Reserve build and commercial book - Management explained that the reserve build is influenced by card loan growth and acknowledged that the mix of the portfolio is different from previous cycles, leading to higher reserve intensity [25][28] Question: NBFI lending risks - Management clarified that most NBFI lending is highly secured and that they do not perceive elevated risks in this area compared to other lending sectors [45][50] Question: Mortgage lending and government actions - Management discussed the supply and demand factors affecting mortgage rates and suggested that reducing regulatory burdens could help lower mortgage costs [60][62] Question: Regulatory environment and Basel III - Management noted a bias for action from the current administration regarding regulatory changes and expressed optimism about the direction of Basel III proposals [66][68]