JPMorgan Chase & Co Q4 2024 Earnings Call Transcript

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

Question: John McDonald - Truist Securities - Analyst : Hi, good morning. Jeremy, I wanted to ask about capital and I know you get this question a lot about the kind of high class dilemma of your growing capital base and your perspective of that as earnings in store. So I guess what's the framework for thinking about the opportunity cost of sitting on the growing base of capital and how high you might let that go versus your patience in waiting for more attractive deployment opportunities? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 15, 2025 / 1:30PM, JPM.N - Q4 2024 JPMorgan Chase & Co Earnings Call

Question: John McDonald - Truist Securities - Analyst : Okay. Thanks, Jeremy. And then just as a follow up, we think about the investment spend agenda this year, how does it differ from say last year or last couple of years across lines of business and this kind of certainty of return spectrum you've talked about? And then what kind of efficiencies are baked into the outlook as well? Thanks.

Question: Mike Mayo - Wells Fargo - Analyst : Hi. Simple, and then more difficult, I guess. Jamie, who's your successor? And then the second question is, I know I asked the question at Investor Day, how -- why not stay a CEO a little bit longer, I think what I'm hearing from investors now. It goes up and down, but I think investors would like you to stay. So why say you're going to stay less than five years? You're finally getting what you wanted. 15 years of your spaghetti chart about the regulatory structure and the unpredictability of capital requirements and the regulatory costs. And it seems like you're finally getting what you've been playing for. So why not stay around a bit longer if investors want you to do so? And what would you do otherwise anyway, you don't play golf, you aren't going to be Treasury Secretary. Seems like your work is your hobby, right? So, how much longer would you say around?

Question: Mike Mayo - Wells Fargo - Analyst : Who's your successor? I mean --?

Question: Mike Mayo - Wells Fargo - Analyst : So you'll stay around maybe for a few more years, base case right now.

Question: Jim Mitchell - Seaport Global Securities - Analyst : Hey, good morning. Maybe just on regulation, we have a new administration coming in. We have a new, -- soon to be, I guess a new head of regulation at the Fed. So maybe just talk about again, what areas of the regulatory structure if it were to change would be most impactful for you? And is there any areas where you think capital requirements could actually go down or is this more of a story of requirements just simply stop going up? Thanks.

Question: Jim Mitchell - Seaport Global Securities - Analyst : Yeah, that makes sense. And maybe just as a follow up just on loan growth, have you since the election? It seems like CEO confidence; business confidence has increased. So are you starting to see any improvement in demand on lending? Just any thoughts there would be great.

Question: Jim Mitchell - Seaport Global Securities - Analyst : Okay, great. Thanks.

Question: Erika Najarian - UBS - Analyst : Yes. Hi, good morning. Wanted to follow up on the questions on capital and maybe ask about some of Jeremy, the cross currents in terms of the denominator. So if we look at the third quarter, regulatory data for your GSIB surcharge score, that would imply that your score would put you in a range of a 5% GSIB. So obviously, from what we understand, if you print that, somewhere near that score at the end of this year, then your GSIB surcharge goes up by 5% or by 50 basis points, two years and one day from now. At the same time, around the holidays, we did get the press release from both the Federal Reserve and the lawsuit from the banks in terms of the transparency. It's, -- it looks like the transparency is going to be focused on perhaps being improved as soon as this year's stress test. So as we think of about the definition of excess right, because part of this is like 15.7 is clearly a huge number. So as we think about your returns going forward, the definition of excess also continues to shift. So how should we think about those cross currents in terms of, two big components? Clearly one is your GSIB surcharge and the other is your stress capital buffer.

Question: Erika Najarian - UBS - Analyst : And just a follow up question, follow up to John's line of questioning as a placeholder. As we think about what you said, trying to arrest the growth of CET1 for now, should we just assume that of anything that you don't need for organic growth? And your dividend obligations in terms of that 15.7% when we bought back by the company as we think about, I know you don't want to predict the buy back, but is that sort of just a placeholder for now as we think about what can return back to shareholders in the form of repurchase?

Question: Matt O'Connor - Deutsche Bank - Analyst : Good morning. It seems like you guys have backed off the view that you're maturely over earning on net interest income. And is this all because of the higher rate environment that's expected now, or is it also partly a different view on deposit pricing specifically on the consumer side, which I think you had assumed it would be price a bit more than we've seen?

Question: Matt O'Connor - Deutsche Bank - Analyst : Okay. And it's just separately a strategic question, there's been some reports about you further expanding the consumer banking business globally. And I guess I just want to, push on that where, we really haven't seen other banks do it in a successful way. Obviously, your approach is kind of coming from a position of strength lead digitally. But I guess, I'm just wondering like, is it worth it, is there enough upside to justify maybe some of the increased regulatory and execution risks of doing the global consumer banking?

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

Question: Betsy Graseck - Morgan Stanley - Analyst : Hi, good morning. Can you hear me? Okay. Alright, just want to make sure you can hear me. So this has been a great call. First congratulate -- First congratulations on a great quarter. It's been a great call with a lot of robot's questions here, you're like, what else is there to ask? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 15, 2025 / 1:30PM, JPM.N - Q4 2024 JPMorgan Chase & Co Earnings Call Here's my question. As we think about the NII outlook and you highlighted the NIM pressure but loan, but basically balance is increasing here, right? Maybe you could just speak to the -- could you help me understand the order of the drivers? Is it QT going away deposits going up, punch it into securities? Is it loan growth inflecting? Is there any place in the franchise where you see loan growth opportunities for inflection this coming year? And then lastly, as I think about your comments around, you've got the green market share number one, you've got the yellow, you've got the red places maybe we can't see. Could you help us understand where those yellows and reds are, where they are? Are they just scattered? Everybody's every single business has one or are there some that have more than others and therefore more opportunities? And is it more balance sheet or fee generative? That's kind of what I'd like to just discuss if you have a minute? Thanks.

Question: Betsy Graseck - Morgan Stanley - Analyst : 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. JANUARY 15, 2025 / 1:30PM, JPM.N - Q4 2024 JPMorgan Chase & Co Earnings Call

Question: Ebrahim Poonawala - Bank of America - Analyst : Hey, good morning. I guess just two questions. What in terms of areas of vulnerability? So I heard you, Jeremy on the lending side, but lots of cross currents, like if we anchor to the fact that you have a conversation that's taking place, you'll take office with a focus on domestic CapEx. Even if we don't get any rates cuts when you look through your customer base, where do you see areas of vulnerability, be it because of tariffs, be it because of just lack of any additional relief from the Fed? Yeah, I would love to hear just from a credit quality perspective what no rate cuts might mean?

Question: Ebrahim Poonawala - Bank of America - Analyst : And I guess thanks for that, just sticking with that as far as QT is concerned when you talk to experts, like no one knows what the right level for the Fed to end is. I'm just wondering if you have any thoughts there on how when the fed should end the pressure on the system and what it may imply for deposit growth?

Question: Ebrahim Poonawala - Bank of America - Analyst : No, thank you.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Hi, Jeremy. Hi, Jamie. You mentioned in your comments about the overall [fermite] deposits have stabilized and in the second half, you could see some growth and you already, I think you said you started to see maybe some of that in the consumer checking deposits. We noticed in the industry data from the regulators household checking deposits pre pandemic for the industry. We were running about $1 trillion. Now, they have remained elevated post pandemic at $4 trillion. Can you base on what you're seeing in your customer base. What can you attribute the strain to in this, consumer checking account deposits?

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Very good. And then as a follow up circling back about the capital levels, you guys have been very clear about where you want them to be. Can you share what the pros and cons from JP Morgan's perspective? Not so much from an investor, but we understand, of course, you can do a share repurchase. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 15, 2025 / 1:30PM, JPM.N - Q4 2024 JPMorgan Chase & Co Earnings Call Obviously, you can do non-depository acquisitions with the excess capital. But what are the pros and cons of a special dividend to reduce that excess capital? If you continue with these incredible profitability levels of 20% return on changeable common equity, you're growing your income and capital very nicely every year. But one of those pros and cons again from JP Morgan's perspective.

Question: Gerard Cassidy - RBC Capital Markets - Analyst : Sounds good. Thank you, gentlemen.