JP MORGAN CHASE(JPM) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The firm reported net income of $13 billion and EPS of $4.63 for Q4 2025, with an ROTCE of 18% [2] - Full year net income was $57.5 billion, EPS of $20.18, and revenue of $185 billion, with an ROTCE of 20% [3] - Revenue for Q4 was $46.8 billion, up 7% year on year, driven by higher markets revenue and asset management fees [2] - Expenses increased to $24 billion, up 5% year on year, primarily due to higher volume and revenue-related expenses [2] Business Line Data and Key Metrics Changes - Consumer and Community Banking (CCB) reported net income of $3.6 billion, with revenue of $19.4 billion, up 6% year on year [4] - Corporate and Investment Banking (CIB) net income was $7.3 billion, with revenue of $19.4 billion, up 10% year on year [5] - Asset and Wealth Management (AWM) reported net income of $1.8 billion, with revenue of $6.5 billion, up 13% year on year [6] Market Data and Key Metrics Changes - Markets fixed income revenue was up 7% year on year, while equities revenue increased by 40% [6] - Long-term net inflows in AWM were $52 billion for the quarter and $209 billion for the full year, positive across all channels and asset classes [6] Company Strategy and Development Direction - The company is focused on making necessary investments to secure its position against both traditional and non-traditional competitors [11] - The integration of the Apple Card is expected to enhance modernization and user experience in the card business [36] - The company anticipates strong client engagement and deal activity in 2026, supported by constructive market dynamics [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the macroeconomic environment for 2026, citing consumer resilience and ongoing stimulus [48] - Concerns were raised about potential regulatory impacts, particularly regarding credit card APR caps, which could affect access to credit [40] - The company expects NII ex-Markets to be about $95 billion for 2026, with modest growth in consumer deposits anticipated [10][50] Other Important Information - The company ended the quarter with a standardized CET1 ratio of 14.5%, down 30 basis points from the prior quarter [3] - The elevated level of advanced RWA is expected to reduce to approximately $30 billion in the near term [4] Q&A Session Summary Question: Stablecoin issue and its impact on banks - Management acknowledged the risks posed by a parallel banking system without appropriate regulation and emphasized the importance of consumer benefits [16][20] Question: Deposit growth despite new checking accounts - Management indicated that yield-seeking flows and a lower savings rate are limiting deposit growth, despite strong account openings [21][23] Question: Credit card business and Apple Card acquisition - The acquisition is seen as economically compelling, with expectations for enhanced user experience and integration challenges due to differing technology stacks [36][43] Question: Credit card APR caps and industry impact - Management discussed the competitive nature of the card ecosystem and the potential negative consequences of price controls on credit access [40][42] Question: NII outlook and balance sheet growth - Management provided insights on expected card loan growth and the challenges in achieving deposit growth compared to previous years [50][52]