- JPMorgan’s Q4 net income fell 7% to $13.0B ($4.63/share) after a $2.2B one-time Apple Card credit-loss provision.
- Excluding the Apple Card charge, profit was about $14.7B ($5.23/share), beating expectations.
- Investment-banking fees slipped ~4–5%, while markets revenue jumped (equities ~+40%, fixed income ~+7%) on volatility.
- The Apple Card takeover (~$20B balances over ~24 months) expands consumer credit but raises capital, credit, and regulatory risk as expenses are set to rise in 2026.
Read More
The fourth-quarter 2025 results for JPMorgan Chase reveal a nuanced picture: strength in markets and consumer banking supporting revenue growth, offset by a significant one-time headwind from taking over the Apple Card portfolio. The US$2.2 billion provision for credit losses associated with this forward purchase commitment materially reduced reported earnings, pushing EPS down to US$4.63 from a pro forma US$5.23. This charge explains the miss versus estimates despite solid underlying performance.
Investment banking remains under pressure. Fees dropped roughly 4-5% year-over-year, reflecting continued softness in underwriting and advisory amid macroeconomic headwinds. However, surging markets revenue—particularly from equities and fixed income—offset some of that weakness, showing that JPMorgan’s diversified model continues to provide buffer.
The takeover of the Apple Card business represents a strategic expansion of JPMorgan’s consumer credit portfolio. The deal adds an estimated US$20 billion in card balances. But it comes with trade-offs: the provision reduces capital ratios, increases reserve requirements up front, and exposes JPMorgan to credit risks, especially if consumer delinquency or regulatory constraints intensify. CEO Jamie Dimon and CFO Jeremy Barnum specifically flagged risk factors: sticky inflation, elevated asset prices, geopolitical uncertainty, and proposed caps on credit card interest rates.
Looking forward, cost pressures are high. JPMorgan projects 2026 expenses of approximately US$105 billion—up about 9% YoY—due to investments in AI, marketing, branches, and card business expansion. While revenue growth is promising in several segments, sustaining margins amid rising costs and regulatory uncertainty will be challenging.
Strategic implications include: strengthening its credit card franchise, shedding less profitable or loss-making consumer banking elements (as seen with Goldman), and leveraging its strength in market volatility. But open questions include how regulatory developments (e.g. caps on card APRs) will affect pricing and margins, how credit losses evolve in the acquired portfolio, and whether revenue growth can keep pace with expense expansion in 2026.
Supporting Notes
- JPMorgan’s Q4 net income was US$13.0 billion, or US$4.63 per share, down from US$14.0 billion (US$4.81/share) the same quarter a year ago.
- The bank set aside a US$2.2 billion provision for credit losses tied to its forward purchase commitment to acquire the Apple Card portfolio from Goldman Sachs.
- Excluding that one-time charge, adjusted net income would have been about US$14.7 billion, or US$5.23 per share, beating analyst expectations (~US$4.85/share).
- Investment banking fees dropped by ~4-5% YoY to ~US$2.3 billion.
- Markets revenues rose strongly: equities revenues up ~40%, fixed income revenues up ~7% year-over-year, with total markets revenue up ~17-19% for full year.
- The Apple Card deal is expected to bring over US$20 billion in card balances to JPMorgan once the transition completes (approximate 24-month timeframe).
- JPMorgan expects its 2026 noninterest expenses to total about US$105 billion, up almost 10% from 2025.
- Regulatory risk: proposed cap of 10% APR on credit cards by President Trump could severely impact the card business profitability; JPMorgan warns of potential negative consequences for consumer access.