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JPM Q3 Earnings Lag on Lower Fixed Income Markets, IB Offer Support
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Key Takeaways
JPM's Q3 adjusted earnings of $5.75 per share miss estimates, while revenues rise 8% to $50.17 billion.
JPMorgan's trading revenues surge 15%, investment banking revenues climb 15% and NII rises 13%.
JPMorgan raises its 2026 NII outlook to $106.2 billion but lifts its expense forecast to $108.6 billion.
JPMorgan’s (JPM - Free Report) third-quarter 2026 adjusted earnings of $5.75 per share missed the Zacks Consensus Estimate of $5.94. After considering the net investment securities losses of 18 cents, earnings were $5.57 per share, up 9.9% from the year ago.
Reported net revenues of $50.17 billion rose 8% year over year but missed the consensus mark of $52.21 billion. Strong equity trading performance, investment banking (IB) activity and loan growth supported revenues, while fixed income trading business was subdued.
Including the significant item, net income rose 6% year over year to $15.3 billion.
JPM's Trading and Investment Banking Revenues Rise
Markets revenues climbed 15% year over year to $10.32 billion, driven predominantly by Equity Markets. Equity Markets revenues surged 49% to $4.95 billion on strong performance across products, particularly Prime and Derivatives. However, Fixed Income Markets revenues declined 4% to $5.37 billion, reflecting weakness in Commodities, Rates, Credit and Public Finance, partly offset by Currencies and Emerging Markets.
Investment Banking revenues increased 15% to $3.10 billion, largely driven by higher advisory fees. Investment Banking fees rose 14% to $3.01 billion. Payments revenues climbed 14% to $5.62 billion, supported by higher deposit balances, improved deposit margins and fee growth. Securities Services revenues increased 14% to $1.63 billion.
JPMorgan's NII Benefits From Higher Loan Balances
Reported NII increased 13% year over year to $27.04 billion. NII excluding Markets rose 6% to $24.68 billion, supported by higher deposit balances, increased Card Services balances and wholesale loan growth. Lower interest rates partly offset these benefits.
Average loans reached $1.56 trillion, while average deposits increased 8% to $2.73 trillion. The net yield on interest-earning assets improved to 2.48% from 2.45% a year earlier.
JPM's Expenses Temper Gains, Credit Trends Offer Support
Non-interest expenses increased 12% year over year to $27.30 billion. Higher compensation, brokerage and distribution fees, marketing and technology expenses drove the increase. Compensation costs reflected revenue-related payments and an expanding front-office workforce.
The reported overhead ratio deteriorated to 54% from 52% a year earlier.
The provision for credit losses declined 19% to $2.74 billion. Net charge-offs fell $389 million to $2.20 billion, primarily driven by Wholesale. JPM recorded a $539 million net reserve build, mainly in Wholesale.
JPMorgan's Segment Revenues Show Broad-Based Growth
Commercial & Investment Bank revenues rose 14% to $22.73 billion, while net income jumped 20% to $8.25 billion. Banking & Payments revenues increased 16%, supported by higher advisory fees, deposit-related revenues and lending activity.
Consumer & Community Banking revenues climbed 9% to $21.17 billion, while net income grew 13% to $5.67 billion. Card Services & Auto revenues advanced 15%, aided by higher card balances, improved net yield and auto leasing income. Debit and credit card sales volume rose 10% to $539.5 billion, and active mobile customers increased 7% to 64.9 million.
Asset & Wealth Management revenues increased 14% to $6.91 billion, supported by higher management fees and loan balances. Net income rose 11% to $1.84 billion. Assets under management reached $5.21 trillion, up 13%, aided by net inflows and higher market levels.
JPM's Capital Position Remains Solid
JPMorgan's standardized common equity Tier 1 capital ratio was 13.9% as of Sept. 30, 2026, compared with 14.8% a year earlier. Tangible book value per share increased 6.6% to $112.64.
The bank distributed $4.4 billion in common dividends, or $1.65 per share, and recorded $664 million in common stock net repurchases. Management reduced share repurchases during the quarter, prioritizing capital deployment toward franchise investment and client support.
JPMorgan Raises 2026 NII and Expense Outlook
Management now expects full-year 2026 NII of approximately $106.2 billion and NII excluding Markets of about $97.2 billion. Both projections are higher than the previous targets of $105.5 billion and $96.5 billion, respectively.
Adjusted expenses are projected at roughly $108.6 billion, up from the earlier outlook of $107.5 billion.
The Card Services net charge-off rate is expected to be approximately 3.2% for 2026.
For 2027, management's preliminary central case projects NII excluding Markets of around $107 billion, supported by expected balance sheet growth and higher interest rates.
Our View on JPMorgan
New branch openings, strategic global expansion efforts and decent loan demand are likely to keep aiding JPMorgan’s revenues. As rates move higher, the company’s NII expansion pace is expected to gather pace, with an improving lending scenario offering further support. However, mounting expenses and a challenging operating backdrop are concerns.
JPMorgan Chase & Co. Price, Consensus and EPS Surprise
Bank of America (BAC - Free Report) is scheduled to announce third-quarter 2026 numbers tomorrow.
Over the past week, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has been revised marginally lower to $1.11. This indicates 4.7% growth from the prior-year quarter.
Morgan Stanley (MS - Free Report) is also slated to report third-quarter 2026 numbers tomorrow.
Over the past week, the Zacks Consensus Estimate for Morgan Stanley’s quarterly earnings has been revised 3.1% lower to $2.83. This indicates 1.1% growth from the prior-year quarter.
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JPM Q3 Earnings Lag on Lower Fixed Income Markets, IB Offer Support
Key Takeaways
JPMorgan’s (JPM - Free Report) third-quarter 2026 adjusted earnings of $5.75 per share missed the Zacks Consensus Estimate of $5.94. After considering the net investment securities losses of 18 cents, earnings were $5.57 per share, up 9.9% from the year ago.
Reported net revenues of $50.17 billion rose 8% year over year but missed the consensus mark of $52.21 billion. Strong equity trading performance, investment banking (IB) activity and loan growth supported revenues, while fixed income trading business was subdued.
Including the significant item, net income rose 6% year over year to $15.3 billion.
JPM's Trading and Investment Banking Revenues Rise
Markets revenues climbed 15% year over year to $10.32 billion, driven predominantly by Equity Markets. Equity Markets revenues surged 49% to $4.95 billion on strong performance across products, particularly Prime and Derivatives. However, Fixed Income Markets revenues declined 4% to $5.37 billion, reflecting weakness in Commodities, Rates, Credit and Public Finance, partly offset by Currencies and Emerging Markets.
Investment Banking revenues increased 15% to $3.10 billion, largely driven by higher advisory fees. Investment Banking fees rose 14% to $3.01 billion. Payments revenues climbed 14% to $5.62 billion, supported by higher deposit balances, improved deposit margins and fee growth. Securities Services revenues increased 14% to $1.63 billion.
JPMorgan's NII Benefits From Higher Loan Balances
Reported NII increased 13% year over year to $27.04 billion. NII excluding Markets rose 6% to $24.68 billion, supported by higher deposit balances, increased Card Services balances and wholesale loan growth. Lower interest rates partly offset these benefits.
Average loans reached $1.56 trillion, while average deposits increased 8% to $2.73 trillion. The net yield on interest-earning assets improved to 2.48% from 2.45% a year earlier.
JPM's Expenses Temper Gains, Credit Trends Offer Support
Non-interest expenses increased 12% year over year to $27.30 billion. Higher compensation, brokerage and distribution fees, marketing and technology expenses drove the increase. Compensation costs reflected revenue-related payments and an expanding front-office workforce.
The reported overhead ratio deteriorated to 54% from 52% a year earlier.
The provision for credit losses declined 19% to $2.74 billion. Net charge-offs fell $389 million to $2.20 billion, primarily driven by Wholesale. JPM recorded a $539 million net reserve build, mainly in Wholesale.
JPMorgan's Segment Revenues Show Broad-Based Growth
Commercial & Investment Bank revenues rose 14% to $22.73 billion, while net income jumped 20% to $8.25 billion. Banking & Payments revenues increased 16%, supported by higher advisory fees, deposit-related revenues and lending activity.
Consumer & Community Banking revenues climbed 9% to $21.17 billion, while net income grew 13% to $5.67 billion. Card Services & Auto revenues advanced 15%, aided by higher card balances, improved net yield and auto leasing income. Debit and credit card sales volume rose 10% to $539.5 billion, and active mobile customers increased 7% to 64.9 million.
Asset & Wealth Management revenues increased 14% to $6.91 billion, supported by higher management fees and loan balances. Net income rose 11% to $1.84 billion. Assets under management reached $5.21 trillion, up 13%, aided by net inflows and higher market levels.
JPM's Capital Position Remains Solid
JPMorgan's standardized common equity Tier 1 capital ratio was 13.9% as of Sept. 30, 2026, compared with 14.8% a year earlier. Tangible book value per share increased 6.6% to $112.64.
The bank distributed $4.4 billion in common dividends, or $1.65 per share, and recorded $664 million in common stock net repurchases. Management reduced share repurchases during the quarter, prioritizing capital deployment toward franchise investment and client support.
JPMorgan Raises 2026 NII and Expense Outlook
Management now expects full-year 2026 NII of approximately $106.2 billion and NII excluding Markets of about $97.2 billion. Both projections are higher than the previous targets of $105.5 billion and $96.5 billion, respectively.
Adjusted expenses are projected at roughly $108.6 billion, up from the earlier outlook of $107.5 billion.
The Card Services net charge-off rate is expected to be approximately 3.2% for 2026.
For 2027, management's preliminary central case projects NII excluding Markets of around $107 billion, supported by expected balance sheet growth and higher interest rates.
Our View on JPMorgan
New branch openings, strategic global expansion efforts and decent loan demand are likely to keep aiding JPMorgan’s revenues. As rates move higher, the company’s NII expansion pace is expected to gather pace, with an improving lending scenario offering further support. However, mounting expenses and a challenging operating backdrop are concerns.
JPMorgan Chase & Co. Price, Consensus and EPS Surprise
JPMorgan Chase & Co. price-consensus-eps-surprise-chart | JPMorgan Chase & Co. Quote
JPMorgan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates of JPM’s Peers
Bank of America (BAC - Free Report) is scheduled to announce third-quarter 2026 numbers tomorrow.
Over the past week, the Zacks Consensus Estimate for Bank of America’s quarterly earnings has been revised marginally lower to $1.11. This indicates 4.7% growth from the prior-year quarter.
Morgan Stanley (MS - Free Report) is also slated to report third-quarter 2026 numbers tomorrow.
Over the past week, the Zacks Consensus Estimate for Morgan Stanley’s quarterly earnings has been revised 3.1% lower to $2.83. This indicates 1.1% growth from the prior-year quarter.