- JPMorgan beat Q4 adjusted EPS estimates on a trading-led revenue surge (markets +17% YoY), though profit fell including a one-time charge.
- Investment-banking fees fell 5% and missed expectations, weighing on the stock despite strong overall results.
- The bank took a $2.2B reserve tied to acquiring the Apple card portfolio as net interest income rose 7%.
- Executives warned a proposed 10% cap on credit-card interest rates could sharply hit profitability and restrict credit availability.
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JPMorgan’s fourth-quarter 2025 results reflect a firm navigating a bifurcated environment: strong markets activity and resilient lending contrast with softness in dealmaking and rising regulatory risks. The bank beat adjusted profit forecasts, mainly through elevated revenue in markets and growth in net interest income. However, on a full yearly basis, the bank didn’t surpass its 2024 profit record, showing the cost of absorbing oneoff risks and softening parts of its investment banking franchise.
Investment banking remains a wildcard. Fees dropped 5% year‐over-year, and debt underwriting in particular underperformed analyst expectations, even as the bank had guided for modest growth. This suggests deal activity isn’t broad-based or powerful enough against the macro backdrop to offset regulatory headwinds and investor caution.
The Apple credit card acquisition illustrates both opportunity and risk. While the deal boosts JPM’s credit card portfolio and long-term scale, the required $2.2B reserve reveals underlying risk in taking over higher loss-rate loans. Alongside this, proposals to cap credit card APRs at 10% could significantly compress margins and force trade-offs in credit availability or pricing, particularly for higher-risk consumers.
Looking ahead, regulatory shifts, cost pressures, and interest rate changes dominate the strategic risk stack. The bank’s guidance for 2026 signals continued focus on growing net interest income (excluding markets to ~$95B) and accepting that investment banking may lag, while investing heavily in payments, card, AI, and risk management capabilities. Execution in cost discipline and credit performance will be under scrutiny.
Open questions include: Can deal flow recover meaningfully in 2026? How will interest rate regulation evolve? What will be the long-term credit loss profile in the Apple card portfolio? And how well can JPMorgan protect its earnings power if significant parts of its business face headwinds from policy and macro risk?
Supporting Notes
- Adjusted earnings per share (EPS) were $5.23, beating the $5.00 consensus; unadjusted EPS was $4.63 including $0.60/share from a $2.2B charge tied to the Apple card portfolio acquisition.
- Markets revenue increased 17% YoY: equities revenue surged 40%, fixed income revenue climbed 7%.
- Investment banking fees fell 5% YoY to ~$2.3B, missing analyst expectations, with declines in advisory, equity capital markets (-16%), and debt capital markets (-2%).
- Net interest income rose 7% YoY to $25.1B; average loans grew 9%. JPM projects 2026 interest income excluding markets to be about $95B.
- Capital markets and volatility drivers: equities’ gains driven by AI bubble concerns and interest rate expectations; fixed income benefited from rate speculations.
- Regulatory threat: President Trump’s proposal of a 10% cap on credit card interest rates; CFO Jeremy Barnum said it could be harmful to consumers and business; average card APR stood near 20–21% as of late 2025.
- Despite strong 2025 stock performance (up ~34%), shares dropped ~2.8–4% on the day of the results, largely due to investment banking shortfall and regulatory fears.