JPMorgan Chase at Morgan Stanley US Financials Conference: Dimon’s Strategic Insights

On Tuesday, 10 June 2025, JPMorgan Chase (NYSE:JPM) participated in the Morgan Stanley US Financials Conference 2025, where CEO Jamie Dimon provided a strategic overview of the bank’s performance and future direction. While highlighting strong financial results and technological investments, Dimon also addressed economic challenges and regulatory concerns, maintaining an optimistic yet cautious outlook.

Key Takeaways

• JPMorgan Chase has maintained a Return on Tangible Common Equity (ROTCE) of over 17% for seven consecutive years.
• The bank invests heavily in technology, with a $2 billion AI investment expected to yield similar benefits.
• Dimon emphasizes the importance of organic growth and strategic capital allocation.
• Regulatory reform and geopolitical factors are key concerns for the bank’s future.
• A digital consumer bank launch in Germany marks a significant step in JPMorgan’s pan-European expansion.

Financial Results

• JPMorgan Chase achieved an industry-leading ROTCE of over 17% for the past seven years.
• The bank allocates approximately 10% of its revenue, or $18 billion annually, to technology investments.
• With $60 billion in excess capital, the bank focuses on strategic growth rather than aggressive capital deployment.

Operational Updates

• The bank is committed to organic growth across all business segments, including commercial banking and wealth management.
• Investments in AI aim to enhance business areas such as fraud detection and risk management.
• A new digital consumer bank in Germany is part of JPMorgan’s strategy to expand its European footprint.

Future Outlook

• Dimon stresses the need for a resilient business model that can withstand economic and regulatory changes.
• Concerns include the impact of $10 trillion in government spending and potential credit stress from high leverage in governments and private credit.
• Dimon is cautious about inflation and stagflation risks, emphasizing strategic planning over speculative forecasts.

Q&A Highlights

• Dimon believes the US dollar’s future as a reserve currency depends on America’s military and economic leadership.
• He is confident in JPMorgan’s corporate culture of collaboration and transparency, which he expects to endure after his tenure.
• The bank aims to establish a profitable pan-European platform for its digital consumer bank, facing competition from fintech companies.

For a detailed understanding, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - Morgan Stanley US Financials Conference 2025:

Betsy Graseck, Analyst, Morgan Stanley: Okay. For important disclosures, please see Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosure. And the taking of photographs and recording devices is not allowed unless you’re authorized. If you have any other questions, please reach out to your MS representative. And with that, I am just so delighted to say, Jamie, Jamie Dimon, welcome back to our conference.

We’re so delighted to have you with us today. And everyone knows, Chairman and CEO of JPMorgan Chase. Just such a thrill. Thank you very Happy

Jamie Dimon, Chairman and CEO, JPMorgan Chase: to be here, Betsy.

Betsy Graseck, Analyst, Morgan Stanley: I did want to kick off by saying congratulations on your twentieth year of running JPMorgan and delivering industry leading profitability with ROTC of 17% plus over each of the last seven years. And we could pull that back in the Excel spreadsheet quite longer if we wanted to. But really, twenty years of just consistent, strong, industry leading performance and it’s really a thrill to have you here. And a question that I wanted to just kick off with is just understand a little bit more about your management style. Before we get into the outlook and the numbers and all of that, I thought this would be a really great opportunity.

So off, ask the question, what do you attribute JPMorgan’s outperformance to?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: of all, welcome everybody. If you do my management style, should probably have my management team up there and they’re probably disagree with what I’m about to say. We’re just we, the team, is pretty we’re just relentless on just about everything. We meet all the time. We go through the issues.

I think the thing, and I really do mean it, is I get in the business, not understanding the numbers but get them right. People don’t allocate properly. They’re not honest about their loss leaders. They give credit to parts of the company that don’t deserve credit. Nothing wrong with having a loss leader.

What level do you look at the business and manage the business? You aggregate everything. It’s very hard to do. And people often inside a company fight for the credit of revenues and expenses and one set of books, proper allocations, proper capital, and then just real discipline around that. And even around that is like each thing has its own are you thinking about if you ran take a small segment of JPMorgan, the small business credit card, you’re competing with American Express.

They are three times our size. But if you were running that business, I’d be asking you, what are they doing better? How do you need it? What’s your you need capital, your technology, your marketing. Very often, a unit like that will have no marketing.

And I’m a fanatic about, are you doing How are you getting paid for? What’s the ROI? What’s the returns? Do you do what they do?

And you do it over an extended period of time, constantly curious and assessing what everyone else is doing Morgan Stanley, Goldman Sachs, Stripe, PayPal. We go around the world and we look at what DBS is doing, HSBC. So you’re always kind of measuring how you’re doing so you don’t get kind of complacent, arrogant. You invest fairly relentlessly on all those things, people, technology. And then you try to have an open environment, which I think is the part that gets rid of the politics and BS that a lot of you know all about.

When people, meetings are run for the boss, they’re not run to uncover and discover, and they’re not more with curiosity and tell the whole truth, nothing but the truth, trying to make someone look good, that everyone should contribute, that everyone who should be in the room is in the room, that all the dead cats are on the table. I I actually had lunch with someone today and said, we don’t have any dead cats. We have a few wounded ones. We’ll put the wounded ones on the table. Where are we creating internal conflict that’s hurting our ability to do things?

And just do that relentlessly. And don’t overreact to the market. The markets go up or down. And don’t overreact to the economy. We don’t know what the economy’s going to do.

Don’t overexpose yourself to risk that you don’t fully understand. Risks are always hidden somewhere. You’re always trying to suss them out. And you can contribute as consistently as you can. Have a little fun.

Get on the road. See your clients. Ask them whether people do better than us.

Betsy Graseck, Analyst, Morgan Stanley: And so looking for opportunities for growth, how are you addressing that?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Yeah, so I think we’re in a very fortunate position. So I remember I’m going back years, even when I was at Travelers and then Citi and then Bank One and then JPMorgan. Remember, there’s this constant chatter about endgame winner? Who’s the endgame winner? And we have to merge.

And they did. So if you look at these banks, and mergers are hard, socially, physically. Getting systems and technology right and cultures right and management teams right, they often don’t work. But Chemical, Chase, Manihani, Bank One, WAMU, Baird. Yeah, we had all of that.

So there is no business we’re in, and I think this is a good thing, but we can’t grow organically. So the thing I ask you when you come in the room is what are you doing to grow organically? Usually management teams start to BS about M and A. Well, we’re not as big as them. We really should think about inorganic growth.

What are you doing organically? And organic is hard. You find I really do mean this inside companies huge resistance to it by the existing sales force, the existing management team. It doesn’t fit the budget. We’ll disappoint the analyst community.

I’m never like that. Are you doing all the things you need to do to build a great business, period. Hiring people, technology, marketing, stuff like that, and then we’ll explain it to our shareholders why we’re doing this and what we hope to accomplish. But that does not mean we shouldn’t be doing M and I’ve always thought that M and A, I learned this way back from Sandy Weil, you get so smart by looking at other companies. And then you’re going make mistakes, and we’ve made a couple of doozies in M and A.

We’ve had a couple of real winners too, and that makes you smart. And then you’re looking at the adjacencies. What can you build? In some businesses, it’s hard to buy something that’s in our main business, though we did First Republic. But there are adjacencies in all of our businesses where I want our people to be looking for them.

I don’t want them to tell me, because this happened in one of these deals, that we’re pushing people to do deals. I would never push them to do a deal. I’m pushing them to look, to think, to analyze, to come back, to suggest. And then if those make sense, we’ll do those too. So during Investor Day, we did take a

Betsy Graseck, Analyst, Morgan Stanley: look at the track record of ROTC again every single year. Last seven years, 17 plus. And then within the organization, you’ve got some business units that are above and some that are sub. How do you think about improving that ROTCE from here? Is it a function of putting more capital towards the above?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: I want to give you some numbers. And you guys, you asked some great questions after the Investor Day. And the two questions that came in, said, those are really great questions to Jeremy Barnum and Michael Grubb, and do not answer them. That’s like TMI. I mean, we’re only going to tell you so much.

And we do tell you an awful lot. And we give too much information sometimes. I want to point out, we had I think there were 12 competitors we used in our proxy and stuff like that, all the ones you know. In the last ten years, including JPMorgan, how many times has a company earned 17% ROTC or better of 120? It’s like 10.

Okay, so I’m saying that out of you should be very thoughtful when you set targets. And how many earned under 6% where we get no pay I get no pay out of my stock restricted stock? It was like 25 or 30. So if you look at the spread, it’s pretty wide. And of the 10, we were six of them or something like that.

Cap One was in that group. Morgan Stanley was in that group. Goldman was in that group once, twice, something like that. If you go to ten years before that, how many were over 17%? It was like thirty years, 30 times.

And how many were below 6%? It was like 20 or 30 times, so a lot. But of those 30, the companies that earned over 17%, half of them went bankrupt. So I have deep respect for competition. They’re coming.

They’re coming everywhere. They’re smart. Wells is back. Citi’s back. Goldman never left.

Morgan never left. You have Stripe. You have, you know, you have to assume there’s competition. So we’re not gonna change the 17. I think it becomes irresponsible.

I remember when Citi did that, they were earning probably the best returns of everybody. They were number one in every single category. And they’re being pressured to they called it increase their operating margin. Well, you increase your operating margin too much, then people like me are going to come in and your margin is my opportunity. That quote’s from Jeff Bezos, by the way.

But that’s what I think about it. So we invest, we earn, we’re in cyclical. Some of those years, we earned over 17%, but we were over earning mostly on credit and a little bit of NII. So I’m just quite respectful that if you do, anyone here got like a 12 PC in front of them? Do 70% compound for forty years and tell me the number.

It, start with 100, 117, 100. Are you doing it? Oh, could someone do that number? I just want to tell you, if you did that number for forty years, you would probably be in the market cap of 100% of America. So let’s be respectful about what 17% is.

So I hope to still do 17%. Now the range of companies so Jeremy put out a really neat chart. And I forgot how many businesses were in it, but we have like look at 40 businesses, I don’t know what detail he did, and some don’t earn 17. That doesn’t make them bad. You can have a business earning 14 that’s very steady, very good, and there are a few like that.

And put the mortgage business, it hasn’t earned 17%. I mean if you add it all together, it’s probably lost money in the last fifty years combined. It’s a shitty business. And it’s being made worse by regulators and rules and regulations. But I think we can eke out a decent return there over time, and we’re working on that.

And you also can’t allocate capital. If you said to me, can I allocate capital to all those businesses? I can allocate capital to a handful of them, not the others. The capital allocation to others is an outcome of sales and decisions you make and things like that. It’s not an input.

Whereas I could input into if I wanted to grow certain credit or certain markets, I could input that. And so we’re quite conscious of that and how you earn capital over time. And what, by the way, is also seasonal. There are certain things that are not seasonal, but you’re in a cycle that you probably will get better and some will probably get worse.

Betsy Graseck, Analyst, Morgan Stanley: Okay. So as we’re thinking about capital

Jamie Dimon, Chairman and CEO, JPMorgan Chase: But the organic growth is the most important. If you can earn 17% and grow organically, that’s where the value comes from. I mean, just do the numbers. If you were earning 17% and you can’t grow, then you’re a bond. And you’ll trade at a 6% yield or something like that, and that’s a whole different issue.

Betsy Graseck, Analyst, Morgan Stanley: So when you think about this panoply of businesses that you’re running, is there any in particular that you would like to see larger as a percentage of total? Or maybe some businesses that yeah.

Jamie Dimon, Chairman and CEO, JPMorgan Chase: I think that every single one can grow organically. So in the commercial investment bank, I think middle market, innovation economy, multifamily, basic investment banking can grow, payments can grow, custody can grow, markets can grow. In markets in investment banking, it’s a battle. I mean, that’s like trench warfare. But I think we can actually add market share over time.

In consumer, in auto, mortgage, credit card, consumer, business banking, Chase Wealth Management, Connected Commerce, which is the new kind of travel stuff we’re doing, I think they can all grow. And asset and wealth management, we can grow assets under management. We grow private banking clients. Have other and each one, have initiatives to grow a little bit more like workplace over here, new distribution over here, new products over there. And sometimes it’s the technology.

The technology will give you the ability to grow the business. If you don’t have the new product, new digital thing, you’re not going be able grow. So in each one of those, we hope to grow. We’re not going to succeed in all of them, but that’s what our hope is.

Betsy Graseck, Analyst, Morgan Stanley: And in technology, have to ask the question about AI. And is this something that could be a game changer for you in terms of your already industry leading expense ratio, right? Your expense ratio is lowest, which is the best amongst coverage that I have at least. And I’m wondering, does AI drive that?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: See, issue with AI, whenever you have something that you have so AI will drive it, but everyone else has it too. So is it going to change the competitive nature? Now if we deploy it better, faster, and quicker, yeah, then we can have slightly higher returns. But my experience has always been other people catch up. And remember, even smaller banks, when they get AI, they can do it themselves.

And they’re going to get it from Fiserv or FIS or Salesforce or stuff like that. So it isn’t like the game isn’t like, oh, the big guys are simply going own it. They’re not. You’re going have to fight out for it. And I also point out this is just an important distinction.

We have a lot of CRM systems. We have a lot of clients. If you came in and looked at some of them, you’d say, you would not be happy. Because that’s not exactly right. You’re not doing it.

It’s hard to transfer across the company. Why did you do two systems? All true. If you’re a community bank, what’s your CRM system? What is it?

It’s the banker. I know her. I know her kids. I know her parents. I know her business.

I know when your kid goes to school. I know where they go to school. I get them the credit card they need. I don’t need a CRM. I know all the businesses down the street.

I know who they are. I know which ones are good citizens and which ones aren’t good citizens. And so there are competitive advantages that have nothing to do with AI. And so AI may help us compete that way. But yeah, so I do think we’ll deploy AI.

And I think we get rated as we’re very good at it. So when I meet, I often think we’re not doing We’re not getting the benefit. We haven’t had enough projects. We haven’t done things. So we put up that chart for you guys.

It showed, I think we spent $2,000,000,000 on it. And roughly, we say the benefits are at $2,000,000,000 There’s some things we do. There’s no benefit. We’re doing it because we just think it’s kind of a table stakes. And there are other ones like in fraud, risk, marketing, prospecting, idea generation, note taking.

Yeah, we use AI and we can kind of identify specific categories of benefit, which we should do. We should always justify it to ourselves but not overdo that. I mean, I’ve been at meetings sometimes where people, they have all these people out trying to do NPVs and what was the benefit of digital account opening to consumer? Well, you open it up. You save time.

You gain accounts. You lost accounts. The NII is different. You’ll spend the whole rest of your life. On something like that, I would say the same thing.

The customer’s going to want it. Just do it. Just move on. Don’t do six months of NPV analysis. And other things you should do the analysis, because spend a lot of discrete money in something that you’re not sure is going to pay off or not.

Digital account opening is table stakes.

Betsy Graseck, Analyst, Morgan Stanley: Well, you invest 10% of your revenues in technology annually, roughly, right? $18,000,000,000 this year?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: It’s $18,000,000,000 yeah.

Betsy Graseck, Analyst, Morgan Stanley: Right. So as a result, I’m sure you’re doing the ROI to make sure that that’s got a good return.

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Yeah, well, we do the ROI on a bunch of it, but not all of it. And we do know we get benefits around $2,000,000,000 to pay for the $2,000,000,000 But I think what we’re going see more is people are going spend more on AI for now. They’re getting benefit, but the costs are also going up. Some costs are coming down. The cost of running some of these models have dropped dramatically, but your usage has gone way up.

It’s still not perfect. It takes up a lot of data time and compute power and management time just to go out there. I’m heading out to California after this, and you get smarter every single time. But we are devoted to AI. I think it is real.

I think it will change a lot of things. I think the thing you should also think about is sometimes technologies do things that you don’t the future has figured out. Cars created suburbs or shopping centers. You didn’t have shopping centers, you had cars. And so there are other things that take place because it’s AI.

I don’t know what those things are, but you could look at it I saw the guy from Klarna was on stage at one of JPMorgan’s events and said, when you have agents and they’re going to be searching for the best price and the best thing, all you banks are dead. Okay. I said, thank you. But I don’t think that’s true. But I think he missed a couple of major points because we already compete on price all the time.

We’re completely used to that. But I do think you will have things like that where it changes the business. It’s not just an enhancement. It actually can eliminate it. And so we have our eyes out for that.

But at the end of the day, here’s what you have to do. You have to hold your money, move your money, invest your money, raise money, do it safely. And we’re going be pretty good at that stuff, hopefully using technology to do a better job for you faster and cheaper.

Betsy Graseck, Analyst, Morgan Stanley: Great. Thanks so much for that. And that’s on JPMorgan. Maybe we could talk a little bit about what you’re hearing and seeing in the client arena, just from the perspective of what’s the

Jamie Dimon, Chairman and CEO, JPMorgan Chase: current Who is Mike Sanemasimo here? Was this morning. Yeah, I mean, congratulations. I mean, boy, they went through a long, arduous road to get out of that thing. I think it was grossly unfair, by the way, from a million different reasons.

Because punishment should fit the crime, not be something you don’t understand at all what the punishment is. So my hat’s off to them. They’ve become, as you know, I always look at competitors, well they’re back. They’ve got great bones. They’re earning good returns.

They’ve got ambition. They’re back.

Betsy Graseck, Analyst, Morgan Stanley: Then what about the client Yeah, wondering what you’re hearing from corporates. We’ve been through a volatile year so far. We had the moments of volatility, yeah. Okay. And how is your conversation going with What’s

Jamie Dimon, Chairman and CEO, JPMorgan Chase: the mood out there? Okay. We’ve been in the soft landing now for a long time. But I have the buts. I’m not going to let go of these buts.

So the consumer, they have money, wages are pretty good, unemployment’s pretty good, they’re spending it, lost all the extra money from COVID is kind of gone. So the lower end folks doing normal behavior substitution, credit losses, delinquencies, you’ve seen the numbers all gone up. But they’ve normalized. And at the upper end of the consumer, they’re still doing travel and spending some money. Their jobs are there.

Their home prices are way up. Their stock prices are way up. They’re still feeling pretty good. Sentiment dropped. Sentiment came back.

The stock market went down. The stock market came back. And then in the corporate side, it’s the same thing. Sentiment dropped. Sentiment’s coming back up.

But business is still Okay. And you see it in the earnings, the announcements, and stuff like that. But the buts are real. And I’m not trying to be negative. We spent $10,000,000,000,000 And this notion that somehow when you spend $10,000,000,000,000 well, of course consumers have more money.

We gave it to them. Of course, businesses are doing better. The consumers spent the $10,000,000,000,000 That goes right through P and Ls for every industry out there. And then we had QE, which we haven’t had the real reversal. The real reversal is just starting in my view.

Like the trillion or something like that isn’t a big deal. The next trillion may be harder than you think, or it’s going to hit a point where it causes some consternation. And then you have all these really complex moving tectonic plates around trade, economics, geopolitics, and future factors, which I think are inflationary, military, restructuring of trade, ongoing fiscal deficit. So it’s okay, but whenever you say consumer sentiment, remember neither consumers nor businesses ever pick the inflection points. They never have.

So if you’re looking for that inflection point, because it really doesn’t matter if it’s up or down, just a little bit, they’re not going to tell you that. You’re going to see real numbers, and I think there’s a chance real numbers will deteriorate soon. Employment will come down a little bit. Inflation will go up a little bit. Hopefully, it’s just a little bit.

I don’t know the full effect of not adding 2,000,000 people in our system every year. We added 8,000,000 people, but you had to assume that four or 5,000,000 were working in the prior four years. That’s now zero. I don’t know what that means in terms of, obviously, may be why unemployment’s staying low, but at one point it can slow down growth. These are a lot of moving parts.

To me, as a business person, I just build the business. I’m not going to worry too much about those fluctuations, except the big ones, the military alliances, the global economic alliances that matter to the future of The United States Of America.

Betsy Graseck, Analyst, Morgan Stanley: And when you say soon, why soon?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Because we see it a little bit today, which is the tariffs are just hitting. So I think the last numbers I saw, it’s about $1,000,000,000 a day. So all these things were put in place, even if the lower numbers are just starting to affect and hit people. You had a lot of people buying stuff ahead of time, both consumers and businesses for inventory. It’s hard to see what that meant.

So you haven’t seen an effect yet other than in the sentiment. And maybe in July, August, September, October, you’ll start to see, did it have an effect? My guess is it did, hopefully not dramatic. It may just make the soft landing a little bit softer as opposed the ship go down.

Betsy Graseck, Analyst, Morgan Stanley: And how are you thinking about the leverage that your borrowers hold today? I mean, how much of a slowdown do you think they can handle?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Well, that’s a little more complex question. Most of the leverage you see in the world today is in governments and is extraordinary. And deficit levels are extraordinary. If you look at businesses, we don’t have the leverage we have. When you go to ’eight, and you were talking about investment banks, not JP Morgan, leveraged 30 or 41.

Hedge funds, quant funds, sieves, There was leverage everywhere in the public financial system. You don’t really have that. You do have some more leverage, particularly in private credit and with some of the banks on leveraged lending. That is probably a bigger percent of borrowing than it was before. If you look at companies and look at EBITDA, debt to EBITDA, across the range, it’s probably more in the upper end than before.

I think if you have a downturn, you will see more credit stress than people expect. It’s just been a long time that we’ve had that. I’m not sure all that credit was all properly done. My operating assumption is that some people do it really well, but not all. And there will be a little bit of a surprise there.

And we see a teeny bit of deterioration. I know some people here have said not really, but we see a little bit. Middle market, I mean, I’m going to exaggerate the numbers. Losses for like eight years were zero. And now we’re seeing some.

And if you look at upgrades and downgrades, are more downgrades than upgrades. If you look at little things, but none of it’s material yet. And it will not be material. If you look at consumers, their real behavior follows unemployment. So if their employment goes down, then you can see a little more stress in the consumer side.

Betsy Graseck, Analyst, Morgan Stanley: And just a question on private credit. Obviously, well, at the Investor Day, you mentioned you wouldn’t be leaning into credit right now. But then private credit, I think you mentioned that the $50,000,000,000 could go to $100 or $200 that you are looking to invest into that ecosystem. So how do I square

Jamie Dimon, Chairman and CEO, JPMorgan Chase: that? They’re two different things. We will do what the client wants. So we offer a client bank syndicated lending, other capital markets, or direct lending. There are differences.

There are pros and cons. Direct lending is a unit tranche. It can be done faster, specialized covenants, one price as opposed to term A and term B and all that. And they like it, obviously. They’re willing to pay more for it.

I’m not sure I would if I was a borrower, but they’re still paying 200 basis points more for that. But I want you, the client, to decide. And that’s where our $50,000,000,000 comes from, that we can deploy a lot of capital there. Our deployment is an outcome of doing things right. So we’re not out here trying to deploy $100,000,000,000 But if the business is coming in, and it was good business in a way we’re very comfortable, yeah, we’d deploy more money.

But the question is, do I think that now is a good time to buy credit if I was a fund manager? No. I wouldn’t be buying credit today at these prices and these spreads. That’s a different kind of concept. We’re a bank.

We still make loans to clients even when I think spreads are low. But for us, the lending is an outcome. It’s not an input. We’re not trying to put money out there. And whenever I’ve heard that in credit, all my sensors go up.

Credit is a tough game, and it’s been a very easy game for the better part of a decade. And it may not be the next decade.

Betsy Graseck, Analyst, Morgan Stanley: Okay. Yes, you’ve been vocal on the potential risk at the long end of the curve. Anything there you want to remind us of?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: No, it’s just if inflation rears its ugly head or any form of stagflation, that will surprise people. And all can handle 4.5 all of us can handle four point five percent ten year bond rates and probably 5%. But 5.5 or 6% puts a lot of stress on people. All ratios and if you have a recession at the same time, that’s when you have a credit cycle and all that kind of thing. And as a business, my view is you should always be prepared for that, whether or not you think it’s going happen.

I don’t spend that much time guessing about what’s going to happen in ’twenty five or ’twenty six or ’twenty seven Because our business is going to determine the loans we make, the growth, the outcomes. And we try to run the company that whatever happens, we’re actually doing the same thing every day. And then we do trim our sails around credit. Every now and then you can do it a million different ways to be careful about it. We basically just build the business to serve clients.

We want more good clients. Another thing about private credit, which is important to us, remember, in general, when we do a loan, they’re a client of the firm, and we do a lot of other non interest revenue business, not just NII. And that’s important to me. If it was just NII, I’m not sure that I’d be that comfortable as a business doing that. As an investor, maybe, but not as a business.

Now

Betsy Graseck, Analyst, Morgan Stanley: turning to the next couple of years, we do have one thing changing, it seems like, which is regulation. And Jamie, I know since the great financial crisis, you’ve been asking for a holistic review of capital liquidity rule set. What do you think?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: I think you’re going to get some of that. You know, I really do think it’s time, and I urge them, take a step back. It’s not what’s happened. Regularly have been whack a ball. This one doing this, and this one doing this, and this one doing that, adding to this, and LCR, and ELCR, TLAC, and TLAC2, and Tier one, and G SIFI, and some of these calculations, I mean, they’re through the looking glass.

If you actually spent time on them, you’d say, what the hell is that? Like G SIFI has not one risk based measure in it. And no benefits for diversification, I mean nothing. And CCAR is dead wrong. I like stress testing.

And then of course if you’re going to fix CCAR, but you don’t fix GSIFI, and then you do Basel III the wrong way or the fundamental review of the trade book, you get all this mismatch. But the biggest question I ask is, what do you want? Did you want private did you want leveraged lending to leave the banking system? So if they were geniuses and said, that’s exactly intended, they should have said it. They don’t want banks to make leveraged lending.

No problem. Let us know. We’ll move on. And I mean it. Or if you want banks out of the mortgage business, was emotionally out of the mortgage business, just say it.

Don’t want banks in the mortgage business. And then Janet Yellen comes out and says, well, since the banks have moved out of the mortgage business because of the rules and regulations, we need a special facility to finance the brokers if something gets bad so they can fund all these securitizations. And I’m thinking, really? That’s their idea? Force it out of the system that has no liquidity, into a system that has no liquidity, and then the Fed steps in again?

They should look at this stuff. They should look at it for international competitiveness. We are driving a lot of stuff out of the public markets. I’m not talking about private credit now. Just public companies, 8,000 or $4,000 Is that what we wanted?

And why is that? It’s litigation. It’s taxation. It’s cookie cutter rules. It’s ISS.

It’s the cost. If you, our 10 ks, every now and then I get an investor call and say you guys, you’re taking all those risks and derivatives. What about this? You don’t disclose that. Say yeah, we do it on page 144 of the 10 ks.

I mean no one reads them anymore because they’re so full of crap in there that I just I look at what we’ve done. And I’m just saying, is this what we wanted? I don’t think we did the right thing. I think they should fix it. And worse than that, I think we could have built a system.

I mean if I ran the FDIC, which is a mutual insurance company, it’s a mutual insurance company. The losses are borne by us. If I ran the FDIC with my CEO partners, we would reduce the risk that people were taking on interest rate exposure, like Silicon Valley Bank and First Republic. Wouldn’t it happen? We could change certain basic things that would make it much easier for banks, make it easy for community banks.

And we don’t. And unless you’re willing to sit back just like I would do to a company. Don’t justify everything we did the last ten years. Take a sit back, do a real analysis, really think about it, have a lot of conversations. They should have a lot of conversations with bankers around the world, and then try to improve and enhance regulations.

Now you have in place a bunch of people who want to fix the regulations. I applaud that. I hope they do that. I expect you’ll see changes in SLR, maybe LCR, window, resolution recovery, so you probably just throw the whole goddamn thing out since it doesn’t work. 80,000 pages of shit.

The whole thing is amazing to me. Unless people have the ability to see things what they are, you’re wasting your time. I’m hoping they do that. And I think they will. I’m not looking for radical stuff.

We have $60,000,000,000 of excess capital. It will probably become real excess capital, which puts a little more of a burden on us to but they should do it because it’s the right thing to do, not because JPMorgan wants it.

Betsy Graseck, Analyst, Morgan Stanley: Well, Michelle Bowman did say that they’re going to be bringing together a group from banking, academic

Jamie Dimon, Chairman and CEO, JPMorgan Chase: People actually know shit. Yeah, it’d be good.

Betsy Graseck, Analyst, Morgan Stanley: Regulators in July for kicking off Some

Jamie Dimon, Chairman and CEO, JPMorgan Chase: of these regulatory dealists have no idea about the real world. And I’m being serious. They’re pure economists who do models, and they think those models are the real world, and they’re not.

Betsy Graseck, Analyst, Morgan Stanley: Well, you be there in the July session to

Jamie Dimon, Chairman and CEO, JPMorgan Chase: If they invite me. I’d be happy to go. They all know what I think, so just I write about it, and sometimes in excruciating detail. And so yeah, I would like to be part of fixing the system and making it safer and helping the smaller banks.

Betsy Graseck, Analyst, Morgan Stanley: Okay. So now on to the topic of excess capital. You just mentioned if this all gets done, maybe it will make that excess capital real.

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Yeah, think it will be real, yeah.

Betsy Graseck, Analyst, Morgan Stanley: What’s the difference between real excess capital and the excess capital you have today?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Whatever. It’s either 45 or 60 or 40. It doesn’t matter. It’s going to be a number. Even today, it depends what they do with G SIFI and some of this other stuff, but I’m hoping that a lot of that becomes excess.

It doesn’t even change anything us because I’ve always known, there was a point, if they went through Basel III and some of these other things, you’d need the whole, you’d need 40 or 50, which of course is absurd. But mean, JPMorgan has $600,000,000,000 of bailable capital, equity and TLAC and stuff like that. And we’ve got a trillion 4 of loans. I mean, where are they going with this stuff? And I hear about, they should have 25% that academic and Stanford says, they should have 25% capital against loans.

We have more than that. If you actually look at the numbers, if you look at RWA and stuff like that, say, who the hell can feel what most of that stuff means at this point? But the hierarchy is the same. We’re going to continue to pay our dividend. We’re going invest in organic stuff.

Maybe not more aggressively, but we’ve been doing that aggressively. And I do think they can use up some of that over time. And then we look at inorganic opportunities, which I’m not there might be, but not enough to bend that curve probably. Or at least not right now. And then buying back stock, and we’re buying back a little.

I don’t think we tell people what that number is. I think it was $7,000,000,000 last quarter. You do know we don’t want to build up the excess, but I like buying stocks when they’re cheap.

Betsy Graseck, Analyst, Morgan Stanley: But your CET1 is at 15 That’s

Jamie Dimon, Chairman and CEO, JPMorgan Chase: the $60,000,000,000 excess.

Betsy Graseck, Analyst, Morgan Stanley: Right, right. So then the other side of this question is how long is it Okay to hold this excess capital? How do you deal with the trade off between the opportunity cost? Well,

Jamie Dimon, Chairman and CEO, JPMorgan Chase: have no problem holding it at all. I look at it if I owned 100% of the company, it would mean nothing to me to own that. That’s just earnings in store and cash away to be deployed. You could argue, raise your dividend. We’ve done it pretty aggressively.

But I can’t suck up that much, really. And I’ve surveyed a bunch of people, our folks have done it, about special dividends. Most people think that doesn’t work. Basically, we’re going to be patient. We will find an opportunity to make real payoffs for our shareholder.

Just give us time. And I don’t want to look at an annual year or something like that.

Betsy Graseck, Analyst, Morgan Stanley: Okay. So as the environment rolls forward, maybe there’ll be more opportunities.

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Yeah. I think there will be opportunities.

Betsy Graseck, Analyst, Morgan Stanley: I did want to see if there’s any questions from the room here. Oh, yeah. Wait for the mic.

Unidentified speaker: Thank you for coming here today. Do you see, with all the kind of stuff that’s been going on this year, that the future of the US dollar strengthens its financial systems is threatened in the future?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: To keep this kind of simple, if we are no longer the military power of the world, the preeminent, and no longer the preeminent economy in forty years, we will not be the reserve currency. So it’s directly related to that. And now there’s no replacement for it. If you were going to give a dollar supported by rule of law, by the court, by the most prosperous nation the world’s ever seen, by a central bank who’s supposed to be independent and stop inflation, hopefully stop inflation, and military. I tell people the military is an important part of what makes America stable.

We’re still the reserve currency. And we’ve heard it a little bit with certain sanctions and certain tariffs. But it’ll still be there. I would be cautious. I don’t think we should misuse sanctions or overdo America bullying of other countries like that for that reason.

But again, it’s going be predicated on the other two things.

Betsy Graseck, Analyst, Morgan Stanley: Yes.

Unidentified speaker: Betsy, congratulations on getting Jamie to your conference. And Jamie, I loved

Jamie Dimon, Chairman and CEO, JPMorgan Chase: your shout out. She’s one of the great analysts. She is. I have tremendous respect for

Betsy Graseck, Analyst, Morgan Stanley: her. Thank you.

Unidentified speaker: And Jamie, loved your shout out on Travelers. As an analyst that followed you thirty five years ago, your management style hasn’t changed one bit.

Jamie Dimon, Chairman and CEO, JPMorgan Chase: I’m still immature, basically.

Unidentified speaker: I think I talk for a lot of people in this room. We wait for your annual letter every year to read it. What two or three annual letters do you wait for?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: I always read Buffett’s, Andy Jassy’s and Jeff Bezos. In my business I would read Fairbanks. I read a tremendous amount. And I read a lot of the research you all do and buy side and sell side and things like grandsons, red observer. Just, I have a gloom, doom, and boom report and stuff like that.

So you always have to be thinking very carefully. I used to remember the, they don’t do it anymore, the outstanding investor. I used to read that cover to cover. But some CEOs, they’re pretty good. Others, it’s just constant corporate problem.

So I don’t read them.

Betsy Graseck, Analyst, Morgan Stanley: Dick? Yes, we have a mic coming to you. Thank you.

Jamie Dimon, Chairman and CEO, JPMorgan Chase: You.

Unidentified speaker: Jamie, a lot of your competitors have programs, one Goldman, one Bank of America, one Bank of New York. But I think of JPMorgan as as, like, not having to do that because

Jamie Dimon, Chairman and CEO, JPMorgan Chase: What’s a

Unidentified speaker: program? Like, where they’re trying to get all the different parts of the business to cooperate and to share information and clients and and and promote, you know, using the whole company. When I think of that happening very organically at JPMorgan in large part, you know, correct me if I’m wrong, because of, you know, kind of your management style and and the culture you’ve created at at the firm. So the question is, how do you feel that that culture will persist when you finally hand the baton off to the next leader of JPMorgan? Can the culture continue to produce the kind of results in sharing and lack of bureaucracy when you drop the mic?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Yeah, I think the answer is yes. It’ll be different. All COs are different. They run places differently. I hope that they’ve learned enough and they do enough that they do what I consider most the right way.

They may be better than me in certain things, and they may be worse than me in other certain things. But I think the culture you’re talking about, my management team meets, and it starts right at the beginning, my week at JPMorgan. I mean, the management team, you all got in a room. And it was like, do you do? Give me your reports.

What do you do? What do do? Share it, all the dead cats at the table. Get your numbers right. Come back on that one.

Follow-up list, deep dives that we would do, just constantly making that happen. Most of people here have been part of that for twenty years now. So if you ask them, they say, that’s embedded and ingrained in how we kind of run the company. And just raise those issues. The issues themselves are always changing.

But the nature of meeting and sharing and honestly assessing, that should not change.

Betsy Graseck, Analyst, Morgan Stanley: And when’s the building going to be ready?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: I’m pretty relentless on that. The building is September. I’m going to move in temporarily in September and then hopefully permanently in December of this year. I was with the union guys. I’ve been over there many times.

One of the big unions, there’s like 1,000 people out there, and he’s huge. And we built the best building in the best city with the best unions. And I have to speak after this guy. So I got up there and said, you built the best building in the best city. But he also said that, one day you’re going to walk by this building with your families, you’re look up and say, that’s what I helped build.

And so I ended by saying, I’m going give you one bed here, Gary. I’m going give you all a barbecue with your families, which we’re doing sometime this summer. There could be thousands of people that come in and enjoy what they built. They did it 14 different I think 40 unions, by the way. And it was a labor of love for all of us.

I mean we all worked on it. Mary Ann and Jen and Mary and Petno and Pinto and different parts of it. And we had a fabulous time. This could be an unbelievable building.

Betsy Graseck, Analyst, Morgan Stanley: Excellent. So the barbecue is set for August?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: It’s set, yes. I’m not going tell you the date, yes.

Betsy Graseck, Analyst, Morgan Stanley: No, no. That’s Okay. I just walk by pretty much every day, so I guess I’ll sense it in a variety of You think

Unidentified speaker: about cohorts of your customer base, how do you think about either the household or the individual that earns somewhere between $150,000 as it pertains to the costs to serve and then the opportunity, either short term or very long term as people grow in their careers?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Yeah, so we have an awful lot of clients in that neighborhood. As you know, are in all 48 branches now, in rural. We’re in LMI neighborhoods. We’re in low income neighborhoods. And we’ve got products and service for them.

There’s some we do because they don’t really make a profit, but we think it’s a great product for the community. But we do it. We’re pretty conscious. That’s why I used to point out that Durbin pushed so many people out the banking system. Because one of the revenue streams for a bank and this is true for a lot of business, not always a direct thing, but they took away $60 a year of debit fee.

And the cost of maintaining an account, so take an average checking account, is $250 It’s like 80% fixed. And the revenue you get is debit and some NII and stuff like that. So obviously, NII is much lower on an account that’s spending $20,000 and has $2,000 in there than something else. But we specialize in that. We have credit cards for that group.

We have what we call the starter segment. And I think Marion was talking about things going after that starter segment. So think of getting them when they’re 18 years old and maybe younger, because Venmo and Chime are getting much younger, lower income. We may not try to compete with all of them, but we’re pretty competitive on those sets.

Betsy Graseck, Analyst, Morgan Stanley: Okay, great.

Unidentified speaker: Thank you. My question is on digital consumer banks. I’m curious, what does it take for those business models to generate 17% kind of returns? JPMorgan is launching one in Germany, a digital consumer bank. So what does it take to really become profitable in that business model?

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Yeah. Well, I’m not going to I mean, we study Revolut and Chime and Klarna and everybody else. Mean, could do your own study. I think some can. I think some of the business models will be almost impossible.

But the other thing you’ve learned about fintech, these folks, they’re pretty good and they morph. They start here and they change that. So if I remember correctly, Square came out with cash in the crisis. And they said invent this new thing. It was a great thing.

And so I always assume they’re going to do other things. They’re move upscale. They’re going to add products. They’re going add services. For us, the long term goal is that we a profitable digital bank, hopefully pan European.

It wasn’t meant just to be in one country or another. Remember, once you’re in a European country, have transportable licenses and things like that, and we will be adding products and services to that bank over time. And the capital, it depends on how you look at capital because we’re going to have hopefully some asset management business, things like that. But I’m quite optimistic it’ll be a good thing more for the next generation than for the next five years. But we should be working on The other thing which I keep on telling my team is I’m not telling you you can’t have physical plants, branches.

So if they came to me and said we want to have a flagship branch in every major city in The UK, there’s good logic, I’d be fine with that. So it might be a combination of both. But remember, I always looked at JPMorgan Chase, we do have competitive advantage. We have a lot of people go cross border. We have a lot of wealthy clients all around the globe.

We’ve got asset management products. You can go online now if you want to be a Chase wealth management client and get digitized simplified versions of our research. That’s $1,000,000,000 worth of research we do that we’re giving to those clients. And I think we’re doing it in two forms, a short form and a longer form. So you can see the whole report or kind of a summarized report.

And I think those things over time are advantages. You will be able to, I think sometime this year, move money from Chase US to Chase UK. So for people moving back and which happens. So we’re worried about doing it right for ourselves. And with Revolut’s worth $60,000,000,000 I mean, I’d like to have some worth $60,000,000,000 I don’t know why we can’t.

Betsy Graseck, Analyst, Morgan Stanley: Excellent. Well, Jamie, thank you so much for your time today.

Jamie Dimon, Chairman and CEO, JPMorgan Chase: Really appreciate Well, thank you. Good luck to everyone.

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