JPMorgan Chase · JPM
JPMorgan cut its buyback to $664 million while its capital ratio kept falling
JPMorgan cut net share repurchases to $664 million last quarter and called it good news, yet its capital ratio fell to 13.9% while its 2026 cost guide rose from $105 billion to $107.5 billion and, by our arithmetic, the fourth-quarter guide implies more.
Published · Inve Research Desk
$664 million
net share repurchases last quarter
An analyst put the bank's buyback at about $1 billion against what she called a normal pace of around $7 billion, and the capital ratio fell anyway, to 13.9% from 14.1%.
How they did last quarter
Profit rose 6% on a year ago, but costs outgrew revenue, deal fees cooled and the capital ratio fell; by our arithmetic the fourth-quarter expense guide points above the $107.5 billion full-year guide.
- Net share repurchases$664 million, net of shares issued to staffvs an analyst's comparison of a buyback of about $1 billion with a usual pace of around $7 billion, on the callThe cut is large; the CEO called it good news because capital is going into the business.
- Core capital (CET1) ratio13.9%vs 14.1% a quarter ago and 14.5% at the end of 2025The ratio fell even with the buyback reduced.
- Noninterest expense$27.3 billion, up 12% on a year agovs managed revenue up 8% on a year agoCosts grew about four percentage points faster than revenue, by our arithmetic.
- Investment banking feesUp 14% on a year agovs up 30% a quarter agoDeal-fee growth slowed to under half its previous pace, and fees fell 8% from the quarter before.
The buyback was cut and capital still fell
In the September 2026 quarter the release shows JPMorgan bought back $664 million of its own stock, net of shares issued to staff. On the call an analyst put the bank's buyback far below a normal pace, though she added that there is no normal cadence. Yet the bank's main measure of capital strength, the CET1 ratio (common equity as a share of risk-weighted assets), slid again, to 13.9%.
Dimon called the cut good news. In his words, "the positive news is the main reason the buyback is down." His reasoning is that the bank can now put capital to work inside its own business at returns better than a buyback offers. In July Dimon repeated that the bank has always wanted to buy back less stock as the price rises.
Lending grew and the surplus estimate fell
In April Dimon put the bank's surplus capital at around $40 billion; on this call he said it was probably $30 billion. His figure has been a rough one; in January he gave a wider range with no firm top. Since April the bank added about $155 billion of risk-weighted assets, the loans and trading positions against which capital must be held, which at the current ratio ties up about $21.5 billion of capital, by our arithmetic, while his surplus estimate fell over the same months. Retained earnings offset part of that, so we cannot say how much of the change growth explains.
The chief financial officer named losses recorded outside earnings (OCI), which we read as the effect of higher rates, as one reason the capital ratio fell. Book value per share, the accounting net worth behind each share, fell to $132.30 from $133.01 in the quarter even though net income exceeded the dividend and the net buybacks. On the capital ratio, the chief financial officer said earnings were more than offset by those OCI losses, higher risk-weighted assets and capital distributions.
The 2027 central case needs balance-sheet growth
If less capital goes to buybacks, the payout has to be carried by earnings, and next year's case is where that would show. Chief financial officer Jeremy Barnum gave a first look at 2027: net interest income, the gap between what the bank earns on loans and what it pays for deposits, excluding Markets (the company's non-GAAP measure), of about $107 billion. He called it a central case to be refined next quarter. That is roughly $5 billion above the pace of the fourth-quarter guide, by our arithmetic. Barnum said "about 1/4 of that is the hikes that are currently in the forward curve." The rest has to come from balance-sheet growth and mix.
Barnum described the rest as a continuation of this year's balance growth, and firmwide average loans were up 10% and deposits up 8% on a year ago, but the consumer-bank deposits he leans on were flat in the quarter. Barnum expects some additional pressure as higher rates pull money into certificates of deposit, which he called speculative. The record gives some comfort: the guide for this year's net interest income excluding Markets was held in January and April and raised in July. This quarter Barnum did not restate this year's full-year figure on the call: he guided only the fourth quarter and said the implied full-year numbers are on the presentation page. Dimon added that the number could change at any point because the bank can change its balance sheet.
Costs outran revenue and deal fees cooled
Expenses are the other half of the plan. The expense guide was raised in July to about $107.5 billion, and with the next quarter's guide the year adds up to about $109 billion, by our arithmetic, using reported noninterest expense for the three quarters against a guide the company labels adjusted expense. Barnum said the company's own implied full-year figure is on a presentation page we have not seen. In the latest quarter noninterest expense grew faster than managed revenue, which adds back the tax advantage on some income.
Revenue is where the cushion would come from, and one part of it, deal fees, is cooling. Investment banking fees rose 14% on a year earlier, a slower pace than the previous quarter's, and Barnum said there was "a little bit" of slowdown in the second half of September. Costs tied to revenue should ease if activity does, but base and headcount costs may not.
What we do not know yet
We do not know yet whether the buyback will return in the fourth quarter. Final capital rules for the largest banks are expected by year-end, according to an analyst on the call, and Dimon's surplus estimate depends on them. We also cannot test the returns on the new deployments: so far the case that they beat a buyback rests on management's word.
In the third quarter it bought back far less, and on the call it called that good news. Dimon said the positive news, not AOCI losses or the coming Basel III rules, is the main reason the buyback is down, and he still sees a large surplus of excess capital. Managements tend to describe a smaller payout as a choice. Whether it was also a necessity usually shows only when the ratio stops falling.
The record: notes, full financial tables
Notes
Impact 4/5 Balance sheet Mixed
JPMorgan buys back just $664 million of stock net as its CET1 ratio slips to 13.9%
JPMorgan repurchased $664 million of its stock net in the September 2026 quarter, and the CEO said the cut is good news because capital is better used in the business. An analyst on the call set a $1 billion buyback against a normal pace of around $7 billion, though she added there is no normal cadence. The standardized CET1 ratio, which the company labels an estimate, still fell to 13.9% from 14.1%. In April the bank put its excess capital at around $40 billion; Dimon now says about $30 billion, a rough estimate, having said $30 billion to $40 billion or more in January.
“the positive news is the main reason the buyback is down”— Jamie Dimon, Chairman and CEO
Impact 4/5 Guidance Positive
JPMorgan's 2027 net interest income case ex-Markets is $107B, about $5B above Q4 pace
Barnum gave a central case for 2027 net interest income excluding Markets (a non-GAAP measure) of about $107 billion, to be refined next quarter. By our arithmetic the fourth-quarter guide of about $25.5 billion is a $102 billion annual pace, so the plan adds about $5 billion, a quarter of it from rate hikes. The 2026 figure opened at about $95 billion in October 2025 and was raised to $96.5 billion in July, though this quarter Barnum did not restate that full-year figure, giving only the fourth-quarter guide and pointing to a slide. Consumer-bank deposits rose 4% on a year ago but were flat on the prior quarter.
“about 1/4 of that is the hikes that are currently in the forward curve”— Jeremy Barnum, Chief Financial Officer
Impact 4/5 Margin Negative
JPMorgan's 2026 expense guide rose from $105B to $107.5B; our four-quarter sum is $109B
The chief financial officer guided fourth-quarter expense to about $27.5 billion. In the September 2026 quarter noninterest expense rose 12% to $27.3 billion while managed revenue rose 8%, so costs grew about four percentage points faster, by our arithmetic. The 2026 guide was about $105 billion in January and April and about $107.5 billion in July; our sum of the four quarters is about $109 billion, using reported noninterest expense against a guide the company labels adjusted expense. Barnum put the Street's 2027 expense view at around $114 billion and said his preliminary read is not far from it.
“the consensus doesn't seem too far off”— Jeremy Barnum, Chief Financial Officer
Impact 3/5 Demand Mixed
JPMorgan investment banking fee growth slows to 14% from 30%, with a late-September lull
Investment banking fees rose 14% from a year earlier in the September 2026 quarter, against 30% in the quarter before and 28% in the first, and fell 8% on the prior quarter to $3.0 billion. The chief financial officer said activity slowed a little in the second half of September, though he described the overall environment as supportive. Equity Markets revenue growth eased to 49% from 86%, and fixed income fell 4%. In July management had said it expected activity levels to remain healthy.
“we did see a little bit of that slowdown in the second half of September”— Jeremy Barnum, Chief Financial Officer
Impact 2/5 Risk Mixed
JPMorgan's reserve build rises to $539 million from $149 million, mostly wholesale
JPMorgan's net reserve build was $539 million in the September 2026 quarter, primarily in wholesale lending, against $149 million in the quarter before, $191 million in the first and $810 million a year earlier. The chief financial officer said the build came from new activity, while the release attributes the corporate and investment bank's $663 million provision ($452 million of reserve build and $211 million of net charge-offs) to net lending activity and changes in the credit quality of certain exposures. Dimon said the bank is tightening up a little on credit. Credit costs remain below a year ago: the provision was $2,743 million against $3,403 million.
“it's not downgrades or change in the outlook or anything like that”— Jeremy Barnum, Chief Financial Officer
Financials
Income statement, last 8 quarters
| Quarter end | PBT | Net profit |
|---|---|---|
| Jun 2026 | 27,516 | 21,155 |
| Mar 2026 | 20,479 | 16,494 |
| Dec 2025 | 17,160 | 13,025 |
| Sep 2025 | 18,743 | 14,393 |
| Jun 2025 | 18,284 | 14,987 |
| Mar 2025 | 18,408 | 14,643 |
| Dec 2024 | 17,375 | 14,005 |
| Sep 2024 | 16,978 | 12,898 |
Balance sheet
| As of | Equity | Debt | Cash | Total assets |
|---|---|---|---|---|
| Jun 2026 | 374,598 | 72,430 | 286,111 | 5,015,069 |
| Mar 2026 | 364,038 | 68,048 | 285,242 | 4,900,475 |
| Dec 2025 | 362,438 | 64,776 | 314,338 | 4,424,900 |
| Sep 2025 | 360,212 | 69,355 | 274,636 | 4,560,205 |
Cash flow
| Year end | Operating | Investing | Financing |
|---|---|---|---|
| Dec 2025 | −147,782 | −265,565 | 269,533 |
| Dec 2024 | −42,012 | −163,403 | 63,447 |
| Dec 2023 | 12,974 | 67,643 | −25,571 |
| Dec 2022 | 107,119 | −137,819 | −126,257 |