This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 75

The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

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Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

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The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

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The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

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The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

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The companies on this list are mobilizing the creative tools of capitalism to help solve social problems.

CTW 2023-

In the summer of 2013, Detroit hit economic rock-bottom. With the city’s population down more than 60% from its 1950s peak, and the auto industry still reeling from the Great Recession, the city declared bankruptcy; its unemployment rate at one point topped 25%. To help the city bounce back, JPMorgan Chase teamed up with local government, other employers, and nonprofits on Invested in Detroit, a program through which the company has poured over $200 million into Detroit’s economy in the form of job training, loans for small businesses, and real estate financing. The bank’s biggest innovations involved extending credit to entrepreneurs and property buyers who lacked the collateral or credit histories to qualify for traditional loans—a major problem in underserved and lower-income communities. To date, Invested in Detroit has helped place some 72,000 Detroiters into apprenticeships or jobs, while providing financing or technical aid to 13,000 small businesses. Detroit’s jobless rate is now just 6.4%. JPMorgan Chase, meanwhile, has benefited from a healthier economy: Since 2017, its numbers of consumer and business accounts, market share, and commercial lending in the metro area have all grown by double-digit percentages. And the bank has taken some of its innovations national: Its Entrepreneurs of Color Fund, first launched in Detroit, has made more than 2,100 loans, worth over $115 million, to entrepreneurs nationwide.

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The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500 2023-JPMorgan Chase

The largest bank in the U.S. got even bigger in early 2023 after acquiring failed lender First Republic. It reported record revenues of $154.8 billion for 2022, up 22% from the year prior. 
<ul> 
 	<li>JPMorgan Chase acquired the $173 billion loan portfolio and $30 billion of securities held by First Republic in May 2023, after First Republic was seized by the federal government amid broader turmoil in the banking sector that started in March when Silicon Valley Bank experienced a run on its deposits.</li> 
 	<li>The bank posted $37.7 billion in profits for 2022. That was down 22% from the year prior, but still made JPMorgan Chase the most profitable commercial bank or financial services company on the Fortune 500.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

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Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

F500 2022 JPMorganChase

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WMAC 2021-08-JPMorgan Chase

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

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This year’s Fortune 500 marks the 67th running of the list.

F500-2021-19-JPMorgan Chase

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G500-2020-038-JPMorgan

As the U.S. plunged into a pandemic-related recession this year, the nation’s largest bank was armed with an exceptionally strong balance sheet. JPMorgan Chase moved up three spots in the rankings from last year, thanks to a 6% increase in net revenue to a record $118.7 billion, with $2.7 trillion in assets. The company posted $36.4 billion in net income—its ninth record result in the past 10 years. However, the outlook for 2020 is less bullish thanks to the coronavirus crisis. CEO Jamie Dimon issued a warning to shareholders: Best-case scenario, he predicted, the pandemic will create “financial stress similar to the global financial crisis of 2008,” including a “meaningful” hit to profits.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-017-JPMorgan-Chase

Heading into a recession in 2020, the nation’s largest bank is armed with a strong balance sheet. JPMorgan Chase moved up one spot from last year, thanks to a 6% increase in net revenue to a record $118.7 billion, with $2.7 trillion in assets. The company posted $36.4 billion in net income—the ninth record result in the past 10 years. However, this year looks different. Since the coronavirus crisis began, CEO Jamie Dimon issued a warning to shareholders: Best-case scenario, he predicted, the pandemic will create “financial stress similar to the global financial crisis of 2008,” including a “meaningful” hit to profits.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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JPMorgan Chase &amp; Co. is the largest of the United States’ “Big Four” banks and a global financial-services company headquartered in New York City. Its principal businesses include Consumer &amp; Community Banking; Commercial &amp; Investment Banking; and Asset &amp; Wealth Management, alongside corporate functions. The present company was created through the 2000 merger of J.P. Morgan &amp; Co. and Chase Manhattan Corporation, and it also reflects the histories of firms including Bank One, Chemical Bank, Manufacturers Hanover, and Washington Mutual. Jamie Dimon has served as chairman and CEO since 2006, leading the bank through the 2008 global financial crisis; in 2026, Doug Petno and Troy Rohrbaugh were named co-presidents as the bank continues its CEO-succession planning.

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JPMorgan Chase (JPM): Company Profile, Stock Price, News, Rankings

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JPMorgan Chase

jpmorgan chase

Good morning, ladies and gentlemen. Welcome to JPMorgan Chase's second quarter 2026 earnings call. This call is being recorded. Your line will be muted for the duration of the call. We will now go live to the presentation. Information concerning forward-looking statements and non-GAAP financial measures included in this presentation can be found in JPMorgan Chase's earnings press release and investor presentation posted on the investor relations website. Please stand by. At this time, I would like to turn the call over to JPMorgan Chase's Chairman and CEO, Jamie Dimon, and Chief Financial Officer, Jeremy Barnum. Mr. Barnum, please go ahead.

Thanks, Amanda, and good morning, everyone. Including the significant items noted on the page, the firm delivered net income of $16.9 billion, EPS of $6.14, and an ROTCE of 23%. Excluding the significant items, revenue was up 15% year-on-year, predominantly driven by markets revenue, higher asset management fees in AWM and CCB, higher investment banking revenue, and higher deposit and loan balances, partially offset by the impact of lower rates. Expenses of $27.3 billion were up 15% year-on-year, largely driven by volume and revenue-related expense, as well as growth in front office hiring and labor inflation. Credit costs were $2.5 billion, with net charge-offs of $2.4 billion and a net reserve build of $149 million.

In terms of the balance sheet, we ended the quarter with a standardized CET1 ratio of 14.1%, down 20 basis points versus the prior quarter, as net income was more than offset by higher RWA and capital distributions. This quarter's standardized RWA increase of approximately $103 billion is largely driven by increases in financing across our markets business, as well as growth in traditional lending. As you saw in our CCAR press release in June, the board intends to increase the quarterly dividend to $1.65 per share, effective in the third quarter. Moving to our businesses. CCB reported net income of $5.3 billion. Revenue of $20.3 billion was up 8% year-on-year, predominantly driven by higher card NII, largely on higher revolving balances, as well as higher operating lease income in auto and asset management fees in wealth management. A few points to highlight.

Consumers and small businesses continue to show resilience despite elevated gas prices and inflation, with higher tax refunds and a solid labor market contributing to strong spend growth. In banking and wealth management, average deposits were up 3% year-on-year and 2% quarter-on-quarter, driven by strong net new checking account growth of over 500,000 accounts this quarter. Client investment assets were up 21% year-on-year, driven by market performance along with strong flows. In card services, we refreshed the Sapphire Preferred card in June, following the successful refresh of several other products over the last 12 months. The CIB reported net income of $9.7 billion. Revenue of $24.9 billion was up 27% year-on-year, driven by strong performance across the businesses. IB fees were up 30% year-on-year, reflecting double-digit growth across all products, with particularly strong performance in equity underwriting.

While this quarter's performance was supported by both some large ECM deals and the acceleration of the closure of some M&A transactions, the pipeline remains quite robust, and the current activity levels seem to be encouraging more activity. As a result, while conversion will obviously be dependent on market conditions, we expect activity levels to remain healthy. In markets, fixed income was up 6% year-on-year, with solid performance in credit, currencies in emerging markets, and rates, partially offset by lower revenue and commodities. The equities business delivered an exceptionally strong quarter, with revenue up 86% year-on-year, reflecting the highly dynamic market conditions. We saw strength across products and regions. Flows were strong, and trading was favorable in both derivatives and cash, and Prime benefited from higher client activity and balances. Turning to asset and wealth management, AWM reported net income of $2 billion, with pre-tax margin of 38%.

Revenue of $6.9 billion was up 19% year-on-year, driven by growth in management fees on higher average market levels and strong net inflows, as well as investment valuation gains, higher loan balances, and higher brokerage activity. Long-term net inflows were $50 billion, with continued strength across fixed income and equity. AUM of $5.1 trillion was up 18% year-on-year, and client assets of $7.7 trillion were up 19% year-on-year, driven by higher market levels and continued net inflows. Before turning to the outlook, corporate reported net income of $4.2 billion on revenue of $6 billion, which includes the significant items noted in the presentation. In terms of the full year 2026 outlook, we now expect NII ex-Markets to be about $96.5 billion, and total NII to be approximately $105.5 billion as a function of markets NII increasing to about $9 billion.

The new adjusted expense outlook is about $107.5 billion, with the increase primarily due to higher volume and revenue-related expenses driven by the activity levels and associated revenue outperformance. Finally, we now expect card net charge-off rate to be approximately 3.2%, reflecting better-than-expected consumer credit performance. With that, we're now happy to take your questions, so let's open the line for Q&A.

Thank you. For participants dialed in on the analyst side of today's conference call, if you would like to ask a question, please press star one to be entered into the queue. We kindly request that you ask one question and only one related follow-up. If you would like to ask an additional question, please press star one to be re-entered into the queue. For our first question, we will go to the line of Ken Usdin with Autonomous Research. Your line is open.

Thanks. Hi, good morning. Jamie, I was just wondering if you could start by just evaluating on the recent management changes and elevation of Doug and Troy to co-presidents, and just anything we should be thinking about in terms of the ongoing development of the leadership team and anything it may mean in terms of your tenure as a CEO from the board's perspective. Thanks.

It's exactly, I think we try to be totally clear on the press release, which is, look, Marianne is an exceptional individual as a human being, as a leader, and is obviously an executive. The board made a decision to go ahead with making two co-presidents, which will be preparing them to do far more at the company, be prepared. Hasn't changed the timetable or anything, and obviously wish Marianne the best. As a result, she decided, when she knew about the plans, that she'd rather retire than stay here. That's it. No mystery.

Okay. Very good. Jeremy, on your follow-up to the strength that you're seeing across investment banking and markets, I know it depends on conversion opportunities and just the environment, but this is clearly far higher level of activity than anyone would have expected. How do you judge the sustainability, and how do you judge just how risk-on are we across the various businesses? Thanks.

Good question, Ken. I would actually bifurcate that a little bit between investment banking and markets, in the sense that by historical standards, investment banking fees were fine, but they weren't at sort of super peak level. They had some room to come up a little bit. One of the things we looked at is, okay, how much cannibalization of the future pipeline might have happened through the acceleration this quarter? Or to what extent were this quarter's results particularly elevated as a result of some of the large high-profile IPOs and other capital raisings in particular. I think clearly there was some pull forward, and clearly the large deals contributed meaningfully to this quarter of results.

At the same time, the pipeline is actually quite robust, and to some degree, it feels a little bit, we're guessing here obviously, but it feels a little bit as if the high profile nature of the activity this quarter and just the generally robust environment is itself begetting more activity. I obviously don't want to get into guiding you, and in any case, we're just guessing. That's maybe just a little bit of context about how we're thinking about the trade-off between the robustness of the pipeline and the fact that there was some pull forward and some kind of exceptional events this quarter. On the market side, I would probably separate between fixed income and equities. All the normal caveats, like we don't know, anything can happen.

Clearly, markets revenues in general have been quite elevated and strong for some time, although, as we pointed out, that also is associated with much more financial resource deployment in support of our clients. I think the particular set of things that happened in equities this quarter, it's a little bit hard to imagine that being repeated. The background environment is quite supportive. We'll see what happens. In the end, we're just trying to serve the clients and manage the risk and get our fair share of the business. Overall, obviously, the environment feels pretty good. I guess you did say something about risk on, and you said how risk on are we. Not to be pedantic, but I think the question, the we matters, right? The market is clearly extremely risk on, and we're kind of takers of that.

We're trying to strike the right balance between supporting all our clients and being appropriately cautious in an environment that has some complicated dynamics in it.

Thank you. Our next question comes from Chris McGratty with KBW. Your line is open.

Good morning. Thanks for the question. On deposits, what stuck out was slide four to me, the growth in CCB in the quarter. Interested in kind of the progression towards that 15% retail market share that you've talked about in the past, and really how higher for longer may impact the pace of market share gains over time. Thanks.

Sure. Let me just do near-term deposits for the company quickly. Let me actually start with wholesale. Wholesale deposit growth was quite strong this quarter, actually, and has been for the first half of the year. If you recall, last year was particularly strong. I think this year we were expecting it to be sort of fine, but slightly less strong. So far, the first sort of half of the year has outperformed our expectations. Obviously, a lot of that is the strength of the franchise and winning deals and taking share, but some of it is also the kind of lending environment, particularly the sort of BFI space and a lot of the data center stuff. However you look at it, you have a little bit of the dynamic of loans creating deposits, and that's going to disproportionately show up in wholesale.

That's probably a little bit of a tailwind for wholesale. On consumer, we talked about expecting low single-digit growth this year, that expectation is still in effect. It's unchanged, which is good because I think there were some different moving pieces there and they could have played out differently in some sense. If you look at what those pieces were, it was fundamentally the balance between ongoing very robust net new checking account growth and the question of yield-seeking flows and the impact that that was having or not having on average balances per account. You saw obviously very strong net new checking accounts this quarter. In light of the fact that the rate environment is a little bit more hawkish, yield-seeking flows are still a factor and probably a little bit of a risk.

On balance, the picture is in line with our expectations for this year, which is good. The question is, how does that all feed into the 15%? What I would say about that is, we feel great about the franchise, and we feel great about how everything is going, and there's no change to that sort of hope or aspiration. I would think about that as a kind of natural long-term consequence of executing the strategy that we believe in across all the various components of it. From focus on primary bank relationships, branch expansion, deepening product-value proposition, et cetera. The view is that the 15% will be an outcome of that, and we still feel good about it.

That's great. For my follow-up bigger picture question on the expenses. Really, the returns that you're getting from the branch build-out, the AI investments, the hire of the bankers. Ultimately, I guess the question is, where are we in the investment cycle? Really, how does it play into the operating leverage outlook over the medium term? Thanks.

I would just say it's a complete continuation of what we've been doing for years. You shouldn't really expect any change.

That's what I was going to say too. Obviously there are other expense dynamics this quarter, which maybe I'll save for another question. In the end, we're investing, we're always going to invest. It's been working, obviously, the returns so far speak for themselves. I think the thing that we've been saying for a long time is that the power of this franchise is such that we are able to aggressively invest for the future for the sake of generating future returns and to solidify the competitive position of the franchise while still delivering exceptional current returns. I think that would be true if we were delivering 15%, 16%, 17% returns. Obviously, when we're delivering these types of returns, it really is firing on all cylinders.

Thank you. Our next question comes from John McDonald with Truist Securities. Your line is open.

Thank you. Good morning. Jeremy, I was wondering if you could talk a little bit about the drivers of the upward revision to the NII ex-Markets on perhaps the cadence too in third quarter, fourth quarter, as we think about the exit rate heading into next year.

Sure, John. Revising up from $95 billion-$96.5 billion for the full year, and you see our first half actual, so you can infer the second half. As Jamie always likes to say, what matters is the run rates and the exit. If you sort of do that math, it does suggest a higher exit run rate, which, in the central case, assuming the yield curve plays out as the forwards currently forecast and the deposit and other drivers are in line with our current expectations, that's what we would expect. Just mechanically, in terms of the drivers of the upward revision, the biggest single factor is deposit balances, I would say, across both wholesale and consumer. Both sort of the overall quantum of it, but also like mix shift inside of that in favor of slightly higher margin overall.

Rates are a little bit higher than when we previously guided, both in the short end and in the back end. As you know, we've got sensitivity to both. Probably our actual sensitivity is a little bit more than the EAR suggests right now because of the outperformance of the consumer betas relative to the model, and that difference is probably disproportionately in the front end. When you assemble that together, you have a little bit of the increase as a function of higher rates, but most of it is balances overall.

Okay. Just to finish up on the NII. The markets NII is guided a bit higher, even though the outlook for rates is also a little bit higher. I guess what are some of the drivers there? Is it balance sheet mix and some other factors?

It's a great question, John. You correctly allude to the fact that we've said previously that the markets NII number is actually liability sensitive, all else equal. Obviously in the context of what we always say, which is that in general, changes in the markets NII, especially when they are driven by rates, are almost always fully offset in the bottom line through NIR. You're right. This quarter, all else equal, based on the higher rates, you would have expected markets NII to be down, and instead the forecast is up. The difference is changes in balance sheet composition, essentially expecting lower amounts of finance, non-interest-bearing assets on the balance sheet in the second half of the year.

At this level of rates, one balance sheet unit of that stuff drives the number quite a bit if you think about it, and can overwhelm sort of the rate effect. That's what's going on there. To just indulge myself for 30 seconds, there's also another interesting nuance, which is you will have noted that we actually increased the equity allocation to the CIB this quarter for reasons that I think are pretty obvious in light of the amount of growth of supporting clients that we've done and the way that's playing through our RWA. The consequence of that is to move some equity essentially out of corporate into the CIB, a lot of that is markets. That obviously comes with a little bit of NII, that NII is moving out of NII ex-Markets into markets NII.

It's sort of a rare exception to the rule that changes in markets NII are offset in the bottom line. This piece, which to be fair, is quite small, it's probably like $150 million, is a part of the increase that we would not expect to be offset on the bottom line, all else equal. Obviously it's left pocket, right pocket at the level of the company.

Thank you. Our next question comes from Erika Najarian with UBS. Your line is open.

Hi. Good morning. I just had one question. I do want to revisit the succession line of questioning because it is so critical for a lot of your current investor base. Jamie, I guess maybe re-asking the question a different way. What characteristics are you and the board looking for in terms of the new leader of JPMorgan? What do you think makes an exceptional CEO in the future as you pass the baton on? Additionally, I think that some of your investors may have read the announcement, particularly Marianne's departure as sort of an extension of your tenure. I'm wondering if we should think about your remaining tenure as more fixed or if investors are still thinking about a more rolling type of retirement date and a longer stay as executive chair.

The question to that is, though the timing's essentially the same, obviously completely up to the board, but it hasn't changed. It's just a natural change that we have to go to about how we go about this. Look, that question is obviously critical, but I've always said you want to be good at management, you want to be good at people, you want to be analytical, you want to be detailed, you want to be a culture carrier, you want to be curious, you want to have heart, you want to have grit, you want to have soul, you want to have work ethic, you want to be able to travel, you want to be able to walk in operating centers and be with CEOs and prime ministers. It's all of that. I could give you a long list of stuff, but it's all of that.

At the end of the day, we're blessed with a lot of people who are great culture carriers across a broad spectrum. No one has all those things in a perfect way, and some of those things you learn, and some of those things you get better at. You know it when you see it. We have two exceptional co-presidents, we have other people at the company who are great culture carriers, but that's what you want. You want it across the whole company, not weighted to investment banking or trading or just big CEOs, but also weighted to the fact that we've got 300,000 employees around the world. In our branches, we have 50,000 top-notch people. In our operating centers and our call centers, we have 150,000 people. You have to be a flexible mind to deal with this new growing complex world.

We have teams of people. As you know, I think it's important, we pointed out that we're blessed to have Jen Piepszak as the Chief Operating Officer, and Mary Erdoes continuing to run Asset & Wealth Management. It's a great team of people, which I am fully confident if I was hit by a truck, which is not my preference, we would be fine.

Just wanted to unpack, sorry, I am going to ask a follow-up question. What do you mean by no change in timing?

Exactly what we said last time. Whatever I said last time, the timetable is essentially the same. Several years, you can use a few years, you can use plus or minus, or obviously, it's totally up to the board, not up to me.

Thank you. Our next question comes from James Mitchell with Seaport Global Securities. Your line is open.

Okay, good morning. Jeremy, maybe a follow-up on the expense question and operating leverage question earlier. Understand completely longer term, no bank can generate perpetual operating leverage. If we look at year-to-date results, it's been a strong revenue environment, but I think operating leverage on an adjusted basis was negative. You alluded to some expense one-offs potentially. No question you're investing heavily and should be, so I get all that. Just when I think about the benefits of AI and technology generally, is there a time over the intermediate term where you think expense growth could slow a little and operating leverage kind of becomes more likely in a period of time over the next few years?

I'm just going to answer that by saying when you have great returns and very good margins, which actually went up this quarter, not down

The notion that somehow you can forever increase your operating leverage is a crazy notion. We don't have that. I think it's part of the reason why banks failed, if you go back 20 years ago. We're never going to have that point of view. AI will have its gives and takes. We can't project. I do think you might actually see a slowdown in growth, maybe a slowdown in 2027 or 2028. The teams are looking at all of our opportunities, and we pointed out over and over again when we have an opportunity to spend more money in marketing, with deposit ROI, we're going to do it. We're not going to have false gods. We have to pray that we can't do something really smart.

I've also pointed out over and continuously that some expenses, if you accounted for them as investments, that they have very good returns, but they're expensive in the short run. AI still remains to be seen because the other thing I think about AI, which is a little bit different than everybody else, is you don't uniquely benefit from AI. The ultimate beneficiary of AI will be our customers. In a competitive capitalist world, we always use AI to do a better job for the customers, and we can't just say, "Oh, it's going to increase our margins and we're going to keep that." If that were true, our margins would be 80% today because of computerization over the last 20 years.

Yeah. Well, all fair. Appreciate it. Just maybe a quick one on regulation. Is there any update on the thoughts on potential for adjustments to the regulatory proposals? Since I know you and your peers have been particularly vocal around the G-SIB surcharge, and some elements of Basel III. Just curious if there's been any developments there.

There are four obvious changes they should make. I think it's unfair when I hear them say, they should do the numbers the right way, and you guys should demand it. Do the numbers the right way. If they think they want to be more conservative, they should add conservatism. They should not do the numbers in a false way to make the number higher. I just think that's intellectual clarity and honesty, and stuff like that. They should get rid of the double count in operating risk capital. They should get rid of the double count in market risk capital. We have $80 billion or more now of market risk capital, and the biggest quarterly loss we ever had was $1.4 billion. Even the CCAR market loss, I think it's like $14 billion or $15 billion.

They should adjust the G-SIB the way they're supposed to going back to 2015, and they should change the way they're doing short-term wholesale funding to be fair to everybody. Those are the things they should do. The number should be the number. If they think we should hold more capital, they should ask us to hold 10% more, and I'd be happy to do that. I'm not happy to have these numbers falsely done.

Yeah. Just to briefly add on short-term wholesale funding, I think there's an important point there in terms of the competitive dynamics that we were really quite explicit about in our comment letter, which I would encourage everyone to read because it's a nuanced thing, but I think if you go through it makes the point very clearly. What they've wound up doing with this change to the short-term wholesale funding is essentially increase the burden on banks like us and Bank of America that have both markets and banking businesses as well as traditional consumer businesses, disproportionately relative to our former investment bank competitors who have a different business mix. I guess conceivably someone could want that as a policy outcome.

I don't understand why you would want that as a policy outcome, because it is disproportionately damaging the ability of banks to serve Main Street. If that's what someone wants, they should say it, and if that's not what they want, then they shouldn't let it happen by accident as a result of a seemingly very technical thing, like removing RWA from the denominator of the short-term wholesale funding contribution to the G-SIB score. I mean, this is a little bit of what Jamie talks about when he's saying like, do the numbers right and just be clear about your policy objectives.

No, absolutely. I appreciate the thoughts.

Thank you. Our next question comes from Matt O'Connor with Deutsche Bank. Your line is open.

Good morning. It seems like everything is firing on most or all cylinders, trading, investment banking, lending, credit. Is this as good as it gets, or, and I know you've kind of flagged some of the risks out there, but is there also an argument to be made that we're earlier cycle given AI and what seems likely to be a big increase in global defense spending, global supply chains management? As we put all that together, what are your thoughts?

It's getting close to as good as it gets. We just don't know how long it's going to last.

Okay. The rate expectations continue to move all over the place out there, and you show that you're kind of well-positioned for higher rates, you make more money. Is there a tipping point where the deposit behavior changes, both from a volume perspective, and then betas, which you alluded to earlier, have been better than expected so far, if we go up a certain amount, do you think there could be a meaningful change in that?

Yeah, that's a good question actually, Matt. I think the short answer is we don't really know. If you'd asked me that question a couple of years ago, I would have said that you're essentially asking a question about the convexity of the rate paid dynamic, especially for consumer deposits, the negative convexity to be specific. If you'd asked me that at the beginning of this rate cycle, I would have said that we would be experiencing that effect right now, and we're not. Just from a common sense perspective, you have to believe that at some point that kicks in.

When we do our stress testing and when we think about not just a slightly more elevated inflation environment and a slightly more aggressive response from the Fed, but something that's meaningfully different, that's a true stress test with an actual change in regime, one of the things that we look at in stress is like, okay, at what point do you have that kind of acceleration and rate paid as a result of that type of environment? That's one of the reasons why it's important not to be naïve about higher rates. Because if you simply take our current EAR, even recognizing that locally the empirical EAR is probably higher than our reported EAR, and you ignore the convexity dynamics, you could convince yourself that a 7% rate environment is great.

Obviously that wouldn't be true if you had to do a massive repurchase of the deposit franchise in order to protect it, essentially.

It's something that we think about. It's in the models. It's very much part of the discipline. The question is when, and obviously there's the larger question of the competitive dynamics and the full value proposition of the deposit franchise especially.

Thank you. Our next question comes from Mike Mayo with Wells Fargo. Your line is open.

Hi. In response to the earlier question, you were asked about operating negative as negative, and you gave the reasons for that. Is operating negative the way you look at things? When you grow revenues 15% quarter year-over-year, percentage wise it's negative, but dollar wise, I think it's positive when I look at slide two. I don't know why-

I'm not going to create the narrative for you, even if you take out those numbers, if you-

Can I just point out another thing? It was positive, but when revenues go up 10%, if your margin overall is 25%, when revenues go up 10%, the marginal return on that, since you're not adding all the overhead, is going to be a lot more than 25%.

Obviously, a rapid increase in revenue drives a big increase in operating leverage.

Yeah. I agree with what Jamie just said. Maybe just since we've had a couple of questions about this and obviously we did revise up this year's expense guidance by $2.5 billion, which is not a trivial number. Maybe I can piece all this together to add a little bit of clarity here. First of all, if you remember the guidance that we gave in fourth quarter last year for the full year for the company, and if you made some kind of reasonable assumptions about what type of markets environment and NII ex-Markets for the rest of the company at the time, and you build out your models or whatever. I don't remember exactly what you had, Mike, but I'm sure that the consensus was for meaningful negative operating leverage in this year's numbers, however defined.

That's why at company update, I gave the long speech about sort of what Jamie always says about why operating leverage in the long term for the cycle is not a thing. Now for a company like us anyway producing the types of returns that we're producing. The root cause of that was essentially that the, as Jamie just said, there's a fixed expense base and there's a variable expense base. The variable expense base is disproportionately associated with kind of capital markets complex, broadly defined. We were in a moment where coming out of the back of the rate hiking cycle and relatively modest deposit growth, et cetera, the NII was still working its way out of the headwinds. In the meantime, we had inflation and investment and the usual stuff driving the expense base.

That sort of was the operating leverage picture for the year. To Jamie's point, since then, in the first half of this year, the capital markets complex has outperformed our then expectations by $6.5 billion. We have booked in the first half of the year, $1.5 billion of additional expenses associated with that. That says a lot about that kind of marginal operating leverage point. Of the $2.5 billion that we increased guidance, $1.5 billion is essentially already booked in a direct sort of happy consequence of the exceptionally strong performance. We've implicitly added $1 billion for the second half of the year, and there are some nuances. I wouldn't draw too many conclusions from that in terms of our expectations about the revenue environment because there are some other factors and there's some timing or whatever.

At a high level, that gives you the picture of the second half of the year will be what it'll be. I think when you look at returns, overhead ratio, any metric that your updated models show for this year, it's obviously exceptional performance principally through the lens of returns, which is what actually matters.

There's a little bit of that in Asset & Wealth Management, a little bit of that in credit card spend, a little bit of that other parts of the business too.

That's why I say a capital markets complex is really the whole company as well.

Your marginal margin based on the number you just gave is 77% on that. Why is that as good as it gets? Are you referring to the revenue environment may be as good as it gets, Jamie? Or are you just being conservative or what?

No, I just think we're in a very healthy, active, exuberant market with very high prices and very high volumes, and we benefit from that. We just don't know how long it will continue. Could it get a lot better than this? It can get better, but how much better? I don't know.

The second question does relate to the management changes and Troy taking over the consumer bank. We don't know Troy as well as we did Marianne. You have a lot more information internally. To oversimplify and exaggerate, we have an FX trader now selling mortgage, credit cards, and deposits. I'm being simplistic for a reason, but what gives you confidence that Troy is the right person to run the consumer business when he doesn't have that experience in the past?

Yeah. Mike, it's a great question. First of all, like I mentioned, how you evaluate people is their analytics, it's their brain power, it's their EQ, it's their heart, their soul, their culture carrier. Can they walk into operating? He's exhibited that in markets, in investment banking. Remember, even the IB is an extensive operations function and back office function, technology function where he's exhibited great expertise. We're completely comfortable with that. I do think it's very important that people have experience across the company. When I've seen investment banks, big banks taken over by someone only from the investment bank who only cares about the investment bank Believe me, the rest of the franchise can suffer. You need respect for the rest of the franchise. I think it's great for him. It's great for the company. He's already excited.

He's always been to branches and out and about, and he'll take it hopefully onward and upward.

Mike, just a minor correction. Troy, with no offense intended to my old good friends who are foreign exchange spot traders, but Troy was actually an options trader, which is also where I started, so I think he would want me to correct the record on that.

Thank you. Our next question comes from Saul Martinez with HSBC. Your line is open.

Hi. Good morning. Thanks for taking my question. I have a broader question on AI, and it is: is there an argument that we're vastly underestimating the potential benefits to efficiency and the impacts on how companies can run their businesses? I know Block is a really different animal than you are on a lot of levels, but they argued when they cut 40% of their workforce that given the advancement in AI tools, if they look at their organizational structure with a blank sheet of paper, they could be much leaner and not sacrifice on product velocity and commercial outcomes. I guess I'm asking if you think there could be a parallel with banks where you can operate with a different structure, be much more agile, be more efficient over time.

I know it's a sensitive topic. I'm curious how you think about these questions and how you're positioning yourself for this world.

It's not a sensitive topic at all. We are going to use AI to do a better job for our clients. That's our job. We fully expect it'll have huge efficiency in certain parts of the company. We analyze it all the time. I think we've mentioned in the past, we spend quite a bit of money on it. We have a lot of MVPs that we know we have. The whole company's working this at this point. I think there's almost 1,000 use cases today, though we'd say that the really important ones are 50 across risk, fraud, marketing, hedging, prospecting, note-taking, idea generation, document reading. It's kind of just starting. We do expect that.

I think you have to put in the back of your mind that there are areas where we may just accelerate what we do that we'd want to get done anyway. Think of certain applications and customer-facing things and stuff like that. We are preparing to make sure we can retrain our people. We have had discrete areas where we did reduce jobs by 30% or 40%, and most of those people offered jobs elsewhere. We do expect that. I also think that over time, remember, this will be offered to smaller competitors too, through Fiserv and FIS and other fintech companies. Over time, we've been doing this nonstop for 25 years with just large computers and mainframes and APIs and various tools and tricks we use. We've always been trying to create more efficient stuff like this. This will be faster. This will be dramatic.

JPMorgan Chase (JPM) Q2 2026 Earnings Call Transcript

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