JPMorgan Chase & Co Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ken Usdin - Autonomous Research - Analyst : Good morning, Jeremy. Wondering if you could start by just kind of amplifying just the macro commentary that you started off on. And given the uncertainty in the world that you referenced, just how are you seeing the activity change across the customer base from consumers to wholesale? And can you just talk through how that's also just informing any changes in some of your growth and reserving expectations. Thanks.

Question: Ken Usdin - Autonomous Research - Analyst : Yeah. And just one question on the NII ex markets holding at $90 billion. Can you just walk us through the puts and takes of just what's the new curve you're using, which also is subject to change every day. And what might have been some of the positive offsets to if you put in more expected cuts than you had before Thanks.

Question: Ken Usdin - Autonomous Research - Analyst : In the curve basis?

Question: Ken Usdin - Autonomous Research - Analyst : It guaranteed not to have the (inaudible)

Question: Erika Najarian - UBS - Analyst : Yes, good morning. This question is for Jamie. Jamie, you were on the media today talking about potential economic turbulence. But Jeremy also mentioned that banking should be -- the banking system should be a source of strength in this turbulence. The equity market always seems to think about the banks as weaker players given how they trade the stocks more on sentiment and fear rather than the math of the ability of the banks to absorb provisions going forward if we do fall into a slower economic downturn. So I guess just the question here is, can you -- do you double-click on how you think this is going to impact the economy going forward and maybe double-click on Jeremy's statement that banking -- the banking system should be a source of strength.

Question: Erika Najarian - UBS - Analyst : Got it. And a second follow-up question. And I don't disagree with you guys on equity market performance of bank stocks. It's just that the mindset of portfolio managers is they always go back to sort of the lowest common denominator of fundamental performance versus thinking about resilience. And to that point, the second question is on the reserve. Jeremy, you mentioned a weighted average unemployment rate of 5.8%. I think that's above where economists are thinking we could peak even in a recession scenario. How should we think about any incremental builds from here? And what you're going -- obviously, deterioration in the outlook, but what more do you need to see in terms of how you make decisions about further builds from here?

Question: John McDonald - Truist Securities - Analyst : Hi, good morning. Jeremy, on that same topic, no change to the full year credit card net charge-off forecast. How do we square that with the rising recession risk? Is it because you already have a couple of months of delinquencies kind of baked in the cake and this is more an issue for next year or just too early to call?

Question: John McDonald - Truist Securities - Analyst : Okay. Yeah, that's what we're kind of thinking.

Question: John McDonald - Truist Securities - Analyst : Okay. Got it. And then just on capital, how does this type of macro uncertainty impact your thinking around conserving capital as opposed to deploying it through your investment agenda and buybacks as the stock gets cheaper. Just -- are you still looking to arrest the increase? Or does this kind of change it?

Question: John McDonald - Truist Securities - Analyst : Okay. Thank you.

Question: Matt O'Connor - Deutsche Bank - Analyst : Good morning. I just wanted to drill down on the credit card spend. Any comments in terms of changing patterns on the consumer card spend? There's been headlines in travel kind of going down. Just talk about some of the puts and takes in that up 7% year by year.

Question: Matt O'Connor - Deutsche Bank - Analyst : Okay. That's helpful color. And then just separately, if we look at the delinquencies for the home lending, they increase both 2Q and year over year. Is that just some of the noise from the First Republic deal as you take the marks up front and then those portfolios essentially [reassessing] from an accounting point of view? Or is there something else going on there?

Question: Matt O'Connor - Deutsche Bank - Analyst : Okay. Thank you.

Question: Steven Chubak - Wolfe Research - Analyst : Hi, good morning and thanks for taking my questions. I wanted to start off with one on the proposed SLR changes and just the impact of rate volatility. Are the treasury is committed to providing relief to the banks under the SLR just to help mitigate some of the volatility in the 10-year. But given the geopolitical concerns, weakening global demand for treasuries, how does it inform your appetite just for purchasing US treasuries if those reforms are implemented and just how you're managing rate risk maybe more holistically across the firm just in light of some of the recent volatility?

Question: Steven Chubak - Wolfe Research - Analyst : Thank you both for that perspective. And just for my follow up, did want to ask on the market outlook. So admittedly less surprising to hear some of the cautious IB commentary in light of the uncertainty. But I was hoping you could just speak to the markets businesses, which have been performing extraordinarily well of late and just given the combination of elevated volatility, but also some indications that clients are taking down risk, how you expect that business to perform over the coming quarters.

Question: Steven Chubak - Wolfe Research - Analyst : That's great. Thank you both for taking my questions.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Thank you. Hi Jeremy. I'm Jamie. Can you guys share with us, if you take a look at the nontraditional lenders, private credit lenders, they've been very active in grabbing market share from the traditional commercial banks over the last two or three years, particularly since the initial Basel III end game proposal came out in July of '23, which is no longer applicable. But are you guys seeing any opportunities where the customers may reintermediate back into the banks like your bank because of this volatility? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 11, 2025 / 12:30PM, JPM.N - Q1 2025 JPMorgan Chase & Co Earnings Call

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Very good. And then as a follow-up, you both just talked about the potential changes to the different regulatory outcome for you and your peers, whether it's SLR or the G-SIB buffer, et cetera. Can you opine for us your views, are you more confident with the new administration, new personnel, whether it's treasury secretary, business or others, the nominees for different regulatory heads that there will be a better chance of real regulatory reform, they see it the way you guys do versus the prior administration?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Very good. Thank you.

Question: Ebrahim Poonawala - Bank of America - Analyst : Thank you. Good morning. I guess I just wanted to follow up on the macro uncertainty. I think when you talk to investors, we've gone from enthusiasm for approved business administration to a lot of headwinds. And I think Jamie mentioned, you'll have companies take down guidance, et cetera, potentially over the coming weeks. I'm just wondering what is it you think we need to see before this uncertainty abates? Are the 90-day pause that we saw with some of the other countries on tariffs, is that enough? I'm just wondering, when you talk to clients, corporate CEOs, what are they looking for from the administration that would inject confidence to get back anywhere close to where we were maybe 60 or 90 days above.

Question: Ebrahim Poonawala - Bank of America - Analyst : Got it. As a follow-up, I think there's a lot of concern also in the treasury markets. We've seen the 10-year move from 399 to 450 in a matter of a week. Just your comfort level in terms of the functioning of the treasury market, do you see the Fed stepping in, pausing QT, maybe even initiating some treasury purchases? Any color would be great.

Question: Ebrahim Poonawala - Bank of America - Analyst : Got it. Thank you so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 11, 2025 / 12:30PM, JPM.N - Q1 2025 JPMorgan Chase & Co Earnings Call

Question: Jim Mitchell - Seaport Global Securities - Analyst : Hey, good morning. Jeremy, just on -- with three to four cuts sort of mostly in the back half of June to December, how do you think about the trajectory of NII this year? Is there a little more pressure towards the end of the year into '26? Just trying to think of that around that trajectory and jumping off point into next year?

Question: Jim Mitchell - Seaport Global Securities - Analyst : Right.

Question: Jim Mitchell - Seaport Global Securities - Analyst : Right. And maybe just on that that point on on volumes and deposits. Obviously, this kind of volatility tends to drive -- as corporates and investors go to cash, tends to drive higher deposits. Did you see that trend in March and particularly in April? What are the trends like in the deposit side of the equation? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 11, 2025 / 12:30PM, JPM.N - Q1 2025 JPMorgan Chase & Co Earnings Call

Question: Jim Mitchell - Seaport Global Securities - Analyst : Right, okay, thanks for taking my questions.

Question: Betsy Graseck - Morgan Stanley - Analyst : Thanks. Good morning, Jamie. Good morning, Jeremy. Two questions, one for Jamie, just to kick off. Jamie, you've been through many cycles. And I think we're all interested in understanding how you think this next cycle is likely to progress. And I'm wondering, is there anything that you've seen in the past that looks like this or that you would suggest if any slowdown coming forward, is it more likely to be similar to what kind of prior cycle you've seen?

Question: Betsy Graseck - Morgan Stanley - Analyst : Excellent. Okay. Thank you for that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 11, 2025 / 12:30PM, JPM.N - Q1 2025 JPMorgan Chase & Co Earnings Call

Question: Betsy Graseck - Morgan Stanley - Analyst : Okay. Thank you so much for that. And yes, looking forward to the next four months and clarity coming. So then one for Jeremy. Question on the wholesale loans. I'm going into this because I noticed your average loan growth, I think it was running at about 2% year on year. And then

Question: Betsy Graseck - Morgan Stanley - Analyst : Yes, just in money markets, Fed funds, the front end.

Question: Mike Mayo - Wells Fargo Securities - Analyst : Hey, Jamie, you just said on this call, there's quote deep recognition of flaws unquote by the new regulatory regime. And can you put -- you or Jeremy put some meat on the bones as far as what's an ideal scenario? You keep the safety and soundness of the system, but you read as much as red tape and bureaucracy as possible, how much could expenses potentially decline. I assume you pass on some of that to customers and you'd keep some of that, and the regulators would save money. So some meat on the bones about the potential concrete savings from deregulation. But before that, the negative, which you highlight in the press release and the Chairman letter about the trade wars, Jamie, you went from trade wars get over to this week, say, do something. So just as far as the tariff journey, what were you initially expecting to what happened? And do you really think next earnings call will be through most of the uncertainty. Thanks.

Question: Mike Mayo - Wells Fargo Securities - Analyst : And you also mentioned hundreds of billions of dollars of extra lending, if you reduce the CET1 ratio, I guess, back down by one-fifth.

Question: Mike Mayo - Wells Fargo Securities - Analyst : One short follow-up. Just first quarter, you mentioned good credit, good trading, good EPS. I'm not sure anyone cares. They're worried more about the things we're talking about here. But in terms of the risk of being an international company, an international US company, during trade wars. And I know JPMorgan is a firm that likes to partner with countries as well as communities and customers. So how do you think about that risk? How should we think about that risk? And hopefully, your voice is being heard to speed things along to whatever can be done, getting it done because you could be in the crosshairs at some point?

Question: Mike Mayo - Wells Fargo Securities - Analyst : All right, thank you.

Question: Glenn Schorr - Evercore - Analyst : Just one follow-up on this whole risk management/regulatory front. I see, I hear, and I agree, flawed regulatory system could be better. We've had massive volatility, the market plumbing has held in okay so far. And you and others have had order lines spectacular trading results. So has something changed? Are the systems better? Are they better able to hand it as your risk management, your people, the diversity of your platform better? Or are there still environments where not all volatility is good? Just curious to get your big picture. Thanks.

Question: Glenn Schorr - Evercore - Analyst : That's a great point. Thanks for that. Appreciate it.

Question: Saul Martinez - HSBC - Analyst : Hey, good morning. Thanks for taking my question. Most of my questions have been asked and answered, but I guess I'll ask about costs since nobody has asked it. But I guess how should we think about the cost structure and any sort of cost optimization efforts. If you do see a revenue slowdown, but not necessarily a severe downturn. I think you do have in the $95 billion guidance. You do have good amount of growth penciled in for investing in bankers and branches and tech and marketing. And I guess, do you -- does it make sense or what conditions would it make sense for you to maybe pull back on some of these investments? Or do you think that's just completely shortsighted unless we see a real significant downturn in the economy? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 11, 2025 / 12:30PM, JPM.N - Q1 2025 JPMorgan Chase & Co Earnings Call

Question: Saul Martinez - HSBC - Analyst : Okay. That's very clear, very helpful. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 11, 2025 / 12:30PM, JPM.N - Q1 2025 JPMorgan Chase & Co Earnings Call