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JPM JPMorgan Chase & Co.

Participants
Jamie Dimon Chairman and CEO
Jennifer Piepszak CFO
Erika Najarian Bank of America
Mike Mayo Wells Fargo
Steven Chubak Wolfe Research
Saul Martinez UBS
Glenn Schorr Evercore ISI
Gerard Cassidy RBC
John McDonald Autonomous Research
Betsy Graseck Morgan Stanley
Brian Kleinhanzl KBW
Chris Kotowski Oppenheimer
Andrew Lim SocGen
Call transcript
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Operator

Good morning, ladies and gentlemen. Welcome to JPMorgan Chase’s First Quarter 2020 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. by. stand Please

ahead. I to time, and to the please turn Financial At Chase’s would Chairman over go Piepszak, Ms. JPMorgan Jennifer Dimon; and call Officer, this Piepszak. like CEO, Chief Jamie

Jennifer Piepszak

Thank you, Operator. morning, everyone. Good

on is As I call. back. entire when know with just we’re the And I for the say, you speak thrilled is heard, Company Jamie me I that he

for the start an COVID-XX, get front into most first of time by extremely crisis. that we we those to of quarter lines our Before want particularly and is recognizing this challenging with the thoughts all us performance, this those are on by affected

this that the back. topics on to it’s a presentation available at The navigate you longer the website disclaimer as is few as we and please always, to our key refer ask address this quarter slightly we environment. And

COVID-XX. responding Starting I’d ways on page X, we’re to highlight the of some to like

employees, As play a our and don’t what will are being and what focused how communities while on firm, transparent here for be today. we we assumptions we an will and this And uncertain customers, know know in we environment. clients, out, is unprecedented about our there

provide priority environment providing our one continue while our in is number way, to employees. a an uninterrupted Our for services work to also safe

past proud incredibly weeks. few the able of over We’re all do that been our has to firm

hit just a few I’ll on here. So, examples

and to have in into XX%. where north from number that work taking to safety. Company assistance risk still those well extra our tools being we are office a other they or including extremely for mobilized Currently, the mindful precautions ways their the managers, ensuring providing And who into of many of we’re And We’ve go for working traders, branch, home and remotely and effectively. groups is feasible, need too. and have finance work XX% the around to globe portfolio we bankers the operations across teams, and workforce about right

treatment their offering U.S. For instance, employees medical free and COVID-related we’re to dependents.

have we our seeking activated and wait been procedures while and of many On our we’ve heightened been the three resiliency plans digital remain branches in customer And have consumer open new XX,XXX side, good to time. them. vast with has majority in self all center over we’re address place the call quarters And while X,XXX quickly capacity options. accessible. service been extended, with And reducing drive-thru progress challenged, assistance, making calls put of our and record times ATMs approximately solutions safety

financially waiving a fees. and providing customers as refunding this our period who payments well for such we’re or struggling during relief time, as certain auto are For XX-day as grace card mortgage,

you by with nonprofits hardest as $XX as billion We month programs drew $XXX more the XXth; we’ve funded $X.X we on on than step, have in billion continue actively clients an we Paycheck in to support And of over numbers representing most are see loan communities March, hit XXX,XXX we business more million $XX approved as liquidity loans. of application and the in their than stage environment. morning, and advice revolvers well new impacted. philanthropic investment. $XX to announced underserved billion as this small some initial small most and with credit. slide providing wholesale, of our supporting to to XXX,XXX businesses we And as our $XX of billion help vulnerable April and the employees. give $XXX market the capital businesses challenging new and clients, of million process, And And to And the Protection customers Program. extensions this than for billion over we’re SBA’s more extended for In during credit the of The clients clients us.

Now, turning our X for financial to on first quarter page performance. highlights

billion net return the and the of EPS billion, $X.X of $XX.X revenue X%. of of $X.XX For income on firm tangible the with quarter, reported common equity

point, While reported number COVID-XX, all later. the impacts of more million our items which derivatives; significant fundamentals due on million crisis bridge largely these and high on funding we $X.X book. very CIB, discuss January level, an reserve in are, quarter detail to It I’ll a a really of underlying approximately quarter markdown items to unfold. two be cities, a was started at to due February, well, a then performed of tale business March the the obvious $XXX in build from this when a spreads credit but $XXX losses and the But might billion; of widening and

would helpful be that businesses. with key it this our dynamic talk I thought highlight through metrics some to And that, across

So, page X. let’s go to

as Starting social broadly. more we initially volume spend distancing implemented travel in a with were card the on sales retail in and left. protocols In restaurants entertainment, top decline March, rapid which then to saw spread and

were in comparison. to initial impacted, as e-commerce categories did see boost spend And brick most has well up supermarkets, now significant provisions. even stocked merchant in excluding normalize. as held mortar & we in to ultimately spend a But decline is whereas discount that up by starting an saw services highlighted spend, similar and clubs, wholesale on While supermarkets, people we stores trends

a It and clients surge in quarter investment grade of terms there ever mind. investment led was was the of largest issuance issuance, to market in was top the desire in liquidity investment clients’ JPMorgan. up banking, as debt shore by remained debt the grade In the page, middle of open, by

average products, rates volumes. more elevated drove And their than which our were peak across January in notably triple most markets, trading across commodities, and at volatility volumes trading

wholesale cash growth meaningfully the driven as by most held revolver primarily saw accelerated in March, draws. loan notably growth, time, those the right, clients on driven secured same And and by balances they At liquidity us. far deposit with accelerating we higher

more through outflows in February February. were strong, than meaningfully flows was And to Long-term AWM were classes, finally, asset by January all flows in in positive offset compared March March. across but this different and

outflows. saw side, On flip inflows more during into the money offset our net funds liquidity government we market prime March, which than significant

by first and or detail more lower and sheet balance NII. flat were due of offset quarter Revenue year-on-year, CIB about was higher I driven rates, prior impact mix our higher by $XX.X billion some items revenue. already four significant $XXX by and to to of was offset X% was markets growth the X% income revenue page largely the down CIB noninterest Onto interest as year million net mentioned, down which markets the results. And

which by structural expense, and by of Expenses up expense largely volume higher revenue and all continued expenses, were billion offset efficiencies. of $XX.X driven investments X%, related higher were legal

were in including costs reserve impact of credit quarter, with expectations. charge-offs a net This $X.X billion, the billion, build reflecting $X.X of prior line and billion net of $X.X COVID-XX

turning some have to X, on page more the detail Now, reserve we’ll builds.

oil second of the prices. unemployment consumer, approximately rate second that Our is increase well the builds net wholesale predominantly $X.X and in billion reserve by COVID-XX the due consists quarter as XX%, reserve recovery of down GDP primarily with U.S. in XX% lower over build quarter rises card, billion to $X.X the year. $X.X followed solid billion half in as assumes for This above and of the and of impact

that each best well the the directly consumer of reflects as in sectors such retail, customers in In build and federal build impacted we programs. assumptions in providing business, oil to and COVID-XX, in majority consumer wholesale, by specific And the government as is stimulus and also most reserve addition as the our our of to are macro estimate payment impact our these for relief of gas.

other expect avoid to sectors We to we be lesser a extent impacted if prolonged downturn. a

U.S. builds in stress in to several oil outlook, significant that and with quarter. what through first If which closed updated the in over for in also building we and now the relative could higher remaining a WTI of next meaningfully be quarter continues in quarter, would books scenario the aggregate our took the we have After we GDP be reflect assumed their that and the quarters to below the end gas second $XX economists more unemployment. hold, deterioration were We XXXX. the

more which duration relief across the primary unemployment and enhanced A will the said, But losses directly customer average effectiveness skews crisis, portfolio. and government than industry that the impact portfolio of prime of is being our our support, consumer help in unknown our our to benefits will mitigants the And though from to even can material, losses. recover as business. be will we we crisis, while losses act clients uncertain, customers and undoubtedly stay what doing our this be will help the

sheet Now, page six. moving to capital balance and on

importantly this absorb were stress. to crisis Our and and needs strong, client the us combined incredibly period power liquidity come. base is losses of in balance an to earnings allowed with extraordinary our a And facilitate going that sheet to inevitable into capital

which would to our clients. our coupled $X this decline the This serve and includes significant that to growth capital March CETX we our billion say, customers resulted to Since ratio up capital net distributed buybacks, both XXth. billion in our $X.X we is prudent For quarter. then, time and a with use And to we the capital always which share at of for distribution a decision which our shareholders, stopped we with earnings was what the outweighed prefer repurchases XX.X%. RWA to in consistent in quarter,

our lending and can you increase the clients. were the critical more which should on growth of drivers time right the which market volatility this RWA, at an see for time, On over key in of bottom page, subside importantly,

It’s in to which our the here why CETX that the use regulatory our range our buffers minimum. may leverage environment have necessary, place. can first it’s order we our mean our below are also to we use internal noting this if go target clients, forward, Going to our in in buffers, falls worth serve to prepared we below sheet balance XX.X% an and ratio buffers precisely like

the on claim dividend bottom is intend it have pay you can approval. base. capital walk our also currently the left, $X.XX to capacity And see on a Board small and CETX pending to in continue as We the

moment remember if including discount forward, beyond before be. on that we our And window, a liquidity just we it’s looking resources to have liquidity. And helpful strong. move facilitated, remains need significant we Even with position on, everything HQLA, the liquidity

and showed volumes increased And utilization shift in starting of forms demand turning across drastic the significantly business on signs for rates of reduced the mortgage net CCB on and pressure payment reserve we strength merchant market. a spend of with billion. across continuation March refi across income we saw consumer side, a including business well the in And as January line and trends. banking X. now, small segment, as on consumer payments, of in to processing deceleration showed February saw again, a and decline $XXX and frequency in early of and all activities, credit. origination except inflows builds reported major community a our And but businesses $X.X page million,

by basis by were lower X%, to environment. NII Average driven points was higher revenue activity. in X% and up quarter, Expenses the further we Deposit growth Revenue higher was billion expansion. decline related X% driven driven growth that offset billion and back of and efficiencies. driven given $X.X sales accelerated builds and the by I net driven In card mentioned partially with banking, revenue servicing growth January margin and the margin production volumes this in And X% loan lower expect partially quarter. up compression, it card X%, consumer to billion, structural February results. Home loan of slide, the margin investments $X.X higher auto, NII, of down costs as by prior $X.X X% was from Turning by revenue. strong driven revenue business offset the deposit lending $XX.X current over was lastly credit down continued offset revenue and year-on-year. earlier net was on XX%, And by of expectations. partially card up the rate by as and on XX included down year-on-year billion business, X%, down and revenue in with deposit consistent costs well charge-offs reserve net by expense card was by

the clients X% billion and grade lines on raise in showed remained At M&A Now helped and investment of shifted, turning reported in market income half ROE CIB of of across of saw environment our of continued net increased the completions, billion as on and grade postponements Investment the announcements a page billion. an banking corporate momentum revenue we we $X on equity last year, delays of new investment credit. $X.X issuance the open from to of bank time, same existing the X. and draws in first the but market and quarter $XXX the quarter debt debt of wide range sectors. approximately investment

By contrast, high market and effectively was widened closed yield spreads the high yield significantly.

million. noting, were quality book it is And our crisis our by XXXX book here, entering As is exposure a was, worth $XXX a a and bridge marked quarter what about it’s bridge the of down result, higher portfolio. commitments

of As revenue IB of $XXX a XX% markdown. bridge million was year-on-year, result book driven by largely backdrop, this down the

year-on-year X% compare regulatory than number all-time only up closing up and one saw Lending rank with spread out share. down tough were large on market up in approvals, rank fees XX%, in last pushing but share, however we strong XX% and Advisory before banks revenue was our effectively IB delays year-on-year, up basis a hedges. driven this Equity and reflecting And underwriting widening We the one maintained the did complete X.X% from XX% was a underwriting due more to closed maintained deals. up We impact also not quarter. loan year an our was of debt XX% points certain quarter in XX wallet the other first X.X% we March. deals challenged versus any February activity and record. with by January was XXXX. of number

risk Looking economy the in rebound in downside is forward, corresponding could the to recovery activity, we protracted. see also if a produce rapid pipeline could downturn our the forward-looking while significant

moving Now, markets. to

several markets, concerns oil substantial correction leading widening billion, to growing year-on-year. trading Day, noting It’s and major strong Here, total decline a This of sharp combination unique volatility, monetary client in the intervention record $X.X prices. by equity Simultaneously, significant in a yields. events XX% performance in and treasury in government we a crisis, also before policy said in the spreads was as change extraordinary at that a Then, up was a we even participation to and followed of further revenue in for volumes spike the markets Investor saw led COVID-XX quarter. triggered increased products. worth drop

XX%, most strength was up in on driven markets and income derivatives, rates Fixed by client in client currencies and was increased activity. notably XX% Equity activity, by emerging markets. equity strong up driven

this In that terms of saying goes too without to early going it’s performance forward. it outlook, project

activity even be In low headwind. low rates may and fact, economic a

continue However, we functioning in our are role in essential to a strong orderly ensuring serving clients’ position markets of playing and the needs.

comprised finance, business was And payments, unit merchant recording now, of of this services trade the treasury part on new services, we’re wholesale which previously quarter, to the and business, CCB.

$X.X was services. by billion X% down driven payments of re-classification reporting Wholesale revenue year-on-year in merchant

levels revenue rates As preserving offsetting clients wholesale focused on liquidity, quarter, we experienced the payments from lower and activity. deposit in headwinds higher payments throughout

lower the like relatively elevated more may be and tailwinds rates services, if this quarter, the low and services, In correction deposit In balances. offset balances, from is potentially offset short than by security balances, increased security transaction lived impact volatility revenue of billion, Market X% up drove elongated. and which payments crisis volumes was deposit market asset wholesale transaction the of year-on-year. impact the volumes and on $X.X

one mentioned And $X.X the and loss that significant by adjustments were costs driven X%, builds other higher driven finally, reserve $X.X upfront. earlier. investments. up Credit referred billion of continued net was was and to by items were I the expenses which legal of a volume-related expenses and million, $XXX Credit I of billion,

year-on-year $XXX approximately higher banking billion builds Now, million on offset lower the on partially lower moving million with deposit on bridge $XXX down and page net $XX income was reported balances. X. NII million. of of commercial including $X.X of Commercial book, markdown rates reserve banking by the onto deposit Revenue XX%

banking million, year. compared revenues prior a $XXX were year-on-year XX% to investment Gross down record

and to in target, our in expect pipeline, confident While softness related some underwriting. M&A our specifically we we equity remain long-term

and discussed cash were Expenses they billion credit with month up basis from X% million that look their as $XX on half the Day. Investor and we lines spot us about ongoing consistent XX% secure a year-on-year, to $XXX liquidity. were of at on investments during drawing Deposits up March coming their with of year-on-year the of clients about with holding increased

the loans End by XX% remain gas. all-time C&I X%. up partially revolver story largely were commercial to oil in up environment by rate loans increases March. is term in we loans builds by I mainly XX%, driven Higher lending unchanged. originations selective. included largely Credit real were lending were which of low of declines C&I and reserve $XXX the utilization charge-offs, driven as remains billion $X high. loans and period as driven mentioned offset estate costs up And in CRE year-on-year, of were net and an XX% here, million by the increased

XX. and page Now on on to asset management wealth

of a of by income XX%. year. to net volatility. was of levels margin in investment and largely These higher the Revenue inflows X% wealth $X.X ROE market in year-on-year, then, addition, and management valuations. the And up reported net offset higher record we of market activity million related pretax on fees and management past $XXX Asset lower over average by with XX% brokerage saw March billion driven increases were recent

year-on-year into the as were growth. and in revenue Expenses saw increased by the were year-on-year $X.X was our more $X.X trillion as wholesale mortgage well January volume by balances offset X% earlier. related strength loan lending. March, were interest and lower client up expenses bearing leading overall of up saw products. impact in million, X% flat of and $XX long-term billion market trillion, net levels. builds strength in industry $X XX% on offset billion billion funds government reserve of the X% business of driven partially February and COVID-XX as higher finally, were expenses. in costs $XX with growth same Net well Credit were liquidity offset than we both and inflows, cumulative of time, $X as March. assets and outflows up inflows investments net significant driven mentioned by At And by AUM the driven inflows we as loan and I were Deposits lower with by in respectively structural as

was million. page to investment lower rates, net on Corporate a Expenses income down to net partially due Now gains loss $XXX decline by $XXX year-on-year. reported Revenue higher million securities. $XXX on were lower of of interest offset XX. primarily year-on-year, on corporate million $XXX a net of million $XX million,

Investor a today, down At XXXX. slightly be you advice turn the now, we CIB in year. expect obviously, significantly. in about page for showed we the quarter, what expected we partially idea to we since second billion to income on rates, to and from to let’s results full net balance which further see we for markets to by XXXX growth backdrop latest And billion. you offset the give interest to and from the sheet of then, NII outlook. for $XX.X expect XX changed Day, And has where the path be an know NII, pressure $XX.X Based NII And

it’s On we on level estimates But heightened so always to the headwinds current best more our to today, based provide even do see noninterest of difficult to XXXX. expect given meaningful and revenue, XXXX guidance uncertainty. compared in

in of neutral. in revenue, NII to and also and $X.X these impact markets which due to a the rates headwinds billion quarter, CIB noninterest therefore decrease revenue addition all else In items two higher the equal, first the to is the offset significant include is

banking to and pressure investment on expect fees. AWM also We see

to adjusted calls. we’ll volume for dependent lower at updated revenue-related And earnings we the Day. of future saying expenses and outlook largely billion, It this and keep at to XXXX without expenses all $XX we be you expect provided versus due market Investor is now goes approximately

around facing So, continues the crisis unprecedented. all globe the to to as up, unfold wrap are the COVID-XX are we challenges

to do we and we what path look the as we And quite talent, there Although going employees, that we forward, what communities, been. the will customers know continue like do always will so. know don’t and be resources for our to is operational we clients, resiliency have have

working is that communities. our harder our than And them work about the thank that resilient We’ve ever proven continue ever our clients, more customers world culture. of just it’s never proud stronger employees operations, we and around with not enough. Our than and about serve being to have people to feels maintaining simply also been teams can’t

line operator, that, the please And open for Q&A. with

Operator

of And from our first Instructions] [Operator question Erika America. of comes Bank Najarian

Erika Najarian

are glad activity. for you’re that My we’re card Hi. Good sense is us if X.X% how you the a in us believe and adverse forbearance to we state, And clients the started product, company-run. should morning. the clients? of example us. they could for it’s payments scenarios? you forbearance for to so your And the could and by in how X.X% severely well nine lending of that to percentage defer of question auto, first government Jamie, quarters on losses, the think join significant many about I and John give home total to relative intervention the enough a for Fed join over your

Jennifer Piepszak

Sure.

of expect obviously start time. easier of millions service I’ll foreclosures built have And I’ll time. in our meaningfully be to options in paused customers made there. record that hundreds and for lending. we’ve first we’ve we through for process we refunded through that accounts auto And digital self with of the and higher saying all, We’ve by already forbearance So, and We’ve approved consumer relief importantly, start repossessions. that payment of across fees. thousands that payment relief dollars

they’re terms of we’ll I X% management late customers what in the card, surgical done And looks has portfolios few over payments we the at we’re portfolios these we’re our to asking outside risk is in payment we’ve said, last relatively to as these give in BAU. forbearance, little years. In And resilient. that quality a just still, rates numbers, April strong. just think see. still of slight strong made book over coming a seeing more seen the a But payments seeing, in auto. are bit, the down seems Xst service you uptick ultimately context of as small compared this what which But, for those mortgage, time, of In but we’ve

terms is I programs, bridge I of mean, significant the the these effectiveness intervention, of we being in key obviously effectiveness people terms I able payments And think, of unemployment how think the enhanced to ultimate ultimate about the extraordinary which or direct unknown. think biggest The back the government employment. is to in are insurance, then,

we we well programs so, assumed, more our that about But those of as payment as for an ultimate the that And have for the impact results, expect we’ll impact certainly could, for and is second to a as lot quarter quarter. learn first customers. providing our on sure relief unknown, we be that in the

Erika Najarian

question, you. XX.X% My below Thank you’re prepared clients. second CETX you go help mentioned to to your that

is XX.X% below the when the restrictions payout. of Fed kicking in start Going automatic also in from terms

income. So, I it net XX% on would thoughts be relative thinking restriction your those payout if about a capital and the on clients your automatic to levels restrictions from wanted to also balancing, eligible understand your it, I just servicing understand And regulators.

Jennifer Piepszak

Sure.

have from us probably amount XX% reasonable below in I you to regulators changes of clarification puts XX.X% buffers. we about in as as there room of very using how And think the bucket. bucket say regulatory a that a you which, would as was recently, we terms made go should helpful say, know, some below XX% remain that Fed we the So, Erika, the that XX.X%. in

in his quite And we’ve Jamie through carefully. clients remaining CETX serving customers. can particularly large we extreme and helpful. this we talked And a are assuming And was that so economy So, the in lockdown the on at scenario, drops our our our at an scenarios, scenario parts range we’ve of looked Chairman’s capital of now, about ensure year. that focused that adverse end that we’re letter in X.X%. to looked managing about of right

to through this and crisis, quite think and clients serve a we we scenarios. to we customers have of And significant at it continue so, but carefully room managing are our looking range

sure we So, prepared. that we’re make

Operator

question of next is Mike Wells Mayo Our Fargo. from

Mike Mayo

welcome between the Questions mentioned do doing supporting that country sheet resiliency litigation as still do Jamie. your you. customers of costs, protecting CEO all things with How for while you not to want the you your balance And Hi. and needle and back, letter? you and those getting hit the unexpected the in thread

Jamie Dimon

it’s Yes. No, very question. a important

last loans to have bad. provider in because need, of capital a times their the obviously, are of customers. banks got to you’ve think resort disciplined lender I be undisciplined always been And

your take you calculated So, risks.

We’re loans. making additional

We’re adults. We you gets $X we was consequences. these XX% point bear to $XXX we’ll start advanced forecast capital of -- and additional last really know even adverse loss, we’ll that CETX, it. handle do a know There and all up economy and we like really, where risk-weighted worse, will that SLR can all though in, that kind we constrain almost other kick in G-SIFI, question if it liquidity, have be the the get but constraints so trillion below billion assets brought may of

And obviously, so, -- and to then then you’ve got look forward.

also If so more all conversations taken. about be Federal That’s to government we and with help the regulators the this, through what off. the little bit our So, income money move meantime, everybody’s we having growth individuals, I But balancing, be the we’re obviously, want going measures we it. a country to do has our we’ll If company, protect to better can get our job. these and to things. PPP in consideration take think, close our you is. the have the extraordinary Reserve that in

Mike Mayo

your and in then with second line. of talk you year. So, back build, CEO unemployment, the XX% half economy on assuming, improves And you’re about the the in the I also on, guess coming economy reserve what your letter,

to come for work base behind your lot assumptions? those base And back a that’s you just have is how So, people what I of a know case case. scenarios but too

Jamie Dimon

after a case. There’s going think enough testing. the you of get work the in of Remember, there work shouldn’t proper of plenty It going capacity about we you all can as that amount from of I retail, But, the it think to one’s safe. after on hope is there’s people talk Jen a where let I’ll and can today food back work, base back government factories, are production, it’s after in CDC turn Yes. thing hospitals, to hospitals. the the we farms, and no to lot very like capacity. instructions binary pharmacies, isn’t that

You’re possible turn will some get medical bad every economy to does health not economy. And need that has ways best get standards worried And on that way consequences, American you can’t practices. beyond the the be advice. sick, very give of just the by who because in company, you the best done adverse all following regional

mental et cetera. substance domestic terms health, of In abuse, abuse,

And is but than a May. get plan won’t do. hopefully good be it So, be rather work a to later, thing to rational to back it’ll sooner

August, that. are about We like talking something June, July,

I your know question. don’t So, that answers if whole

And you base case. the then, give Jen,

Jennifer Piepszak

Sure.

the we for So, outlook of that analytics. there’s were frame the that our a important and lot to goes in GDP second risk like of more some quarter judgment at give management XX% had people, unemployment of how to just note gives kind as context, and we also an XX%. looking economic It’s you to Mike, reserving finance world to a that about and including first other in think it it. above class, But, quarter, down just closed the books that management

best relief And these we think about you reference. And impacts, should well did so, of that as programs as payment of also the But frame contemplate other there, own reserving. a our we just thought number of the of program. a our in about gives what’s scenarios that kind government we of impact extraordinary estimate

of updated prepared noted GDP in and obviously remarks, scenarios, XX%. quarter their and materially outlook in That’s as a back recovery I Both our the now though, the include do second have then, the Since down at unemployment economists year. different. in have half XX% my

learn sure, of But the equal, all will and that the quarter, again, outlook, the employment. we quarter thing a lot in going quarter. for inform equal say end ultimate unknowns, they quarter. a when few our know be the we’re second the would Mike be second lot deteriorated to we But macroeconomic I second we’re else people all to reserves. extraordinary is the course, else of for at going equal so, of we the all through reserves build that one books to number how and effect probably the won’t of only thing judgment in the given these depend still months would expect for bridging And effective have a can programs on else close next these but will second And to back

Operator

Steven Wolfe is Research. from Chubak Our of next question

Steven Chubak

Jamie, Hey. you nice to Good have back. And morning.

to to COVID efforts So, question the actually some CCAR a cycle. by has the remarks real alluding life relating on Friday, wanted I upcoming to stress incorporate to in [ph] of the on ask capital. made some Carl Fed comments

if SCB just I’m whether haven’t requirements? on that from We you could much received any capital year’s which Fed the potentially bigger and the plan potential raise about color on on any are for picture, have your gotten And test. changes they since then. some wondering you contemplating impact maybe this of guidance how thinking

Jennifer Piepszak

Steven. Thanks, Sure.

specific sense gotten guidance, would we that certainly but at So, haven’t makes look like it that. want to a the Fed scenario

as been, have very might regulators to We close staying this crisis. imagine, you our through

then, more about And things. impact, is June. our estimates that we of more our can will potential here, how have learn So, in managing good range it scenarios we’ll manage how understanding but and SCB on are have impact And a of We’ve of incorporated into our a best in given about in June. Fed the absolutely of terms that through learn minimums. thinking we’ll from very they we’ll the the capital

Jamie Dimon

stress week. doing because of the updating this we’re deal it, talking doing time, traditional including have potential testing, at test. type be we COVID-related regulars will to test, tried always stress stress stress I them, a I’ve that’s one what always not and looking JPMorgan with would And our about consider obviously be floor own not we’ll we’re to what extreme, which [ph] through. And go does XXX you always the outcomes. a

Jennifer Piepszak

look We probably -- at outcomes been Yes. both broader. the of range never has

And obviously, us good articulated terms prepared so, start that what for different Jamie out. a we in this we been how extreme But as at said, number And for scenario. Jamie think -- be we’re and of have have to looked CCAR adverse, has a may we place could at an scenarios play too. of one

in is of most thing we’ll about a think, SCB more outcomes. I we’re So, prepared the learn important June. that And for range

Steven Chubak

a Got book. on the it. securities And follow-up just

think where the today, curve, about of are of Jen, us some Just was I then at long this declines given reinvestment on significant you’re could impact with the the hoping end compared help you levels given just deploying excess book? liquidity separately, the how of larger blended deposit QE the And just in that the X.XX% of growth, securities driven yield some environment?

Jennifer Piepszak

Sure.

we do sense. lot makes investment increase growth with on management, expansion, on terms as rates, our this low balance with the environment sheet as a managing obviously activity. see deposit of large balance that is this quarter, dynamic. completely [Technical of in a securities the supporting lower sheet balance the rate you Difficulty] now, So, portfolio, portfolio Right in the a which focused Fed investment securities sheet And in client are different

Our of balance are but prepared to harder range predict is outcomes. right for we sheet a now,

Steven Chubak

Okay. Thanks very much.

Operator

Martinez Our of comes next UBS. from question Saul

Saul Martinez

economic new little do Bruce related a question. think sort just to to talk few you stress much as reasonably next how could that scenario signs think and in calibrate call is it for your up much if in emerge us model CECL to you in to seeing a of directional. base Jen, stress the at signs do up build credit more maybe not measures, for of of of specific we Good much what what now terms quarters, you second just borrower versus can follow maybe actual where is the a mix, build? about that? how is it reserve But more where that it how you show credit you’re is, will in financial get it that looking terms used your about model is short that how of of them to it morning. tangible actual much up And How I how losses? thinking that trying I guess, attribute CECL aren’t in the to numbers, and growth, and gave amount its good your bit much you’re economic but assumptions in of attributed mechanistic of differently I’m of for to of within the seeing time future its wanted showing team mechanistic, Kasman a color period, that underlying on related I’m how quarter? reserves the your on in reasonably economics near that were book changes,

Jennifer Piepszak

Sure.

it’s question, great So, Saul.

emerge start we So, stress by saying that haven’t seen I actually yet. as of would the

use took our future reserve is I we So, of important that first quarter that would estimate It’s term wouldn’t losses. note But don’t growth. what future best also in mechanistic. to I say for necessarily the the we

And so, being future the growth else build. with reserve equal all

actually regulators I assumed to crisis. difference. we that different change of this inevitably And view. time did of capital different CECL. loan, I is of the lot as losses that, best our the is So, it We wouldn’t that estimate a emerge about course the model. would view the their CECL about will I like CECL. under on this necessarily And But is which didn’t the given the through of in is really be say I that’s it. relative impact point said, their of spend because life mean, thinking of of it think given think where of to materially have XX% rules the incurred And

it all again, of have under And way. know so, a have what an model. to we it’s been can else But you different hard we course incurred than didn’t applied really it impossible would equal, judgment model. under And would larger was that think think about

Saul Martinez

still draw-downs Jen, of we we $XXX commitments, that And think -- because terms like how obviously, think about just asset a -- lot evolution? do we Where how pivoting bit. What those in is commitment point that to and where wholesale downs? a draw of helpful. and pressure of that terms to in unfunded room asset risk-weighted like, continue pressure commitments. -- are little of in but growth maybe do That’s in there CETX are growth, on on Okay. I think, billion for much risk-weighted it’s was you

Jennifer Piepszak

Yes.

a it is that So, it things, could we like a predict. say pause revolver will early be seen quarter, on pause. very in so here the draws. well just second other difficult have I many But, to

that and upon second quarter, the about think than our the virus pace at as assuming we revolver albeit the see then, we’re pay-downs own plans we level capital And so, the of will continue ultimate the course will in path depend of first quarter. and timing economic lower And the recovery. the the draws of

Operator

Glenn question next Schorr Our is from Evercore of ISI.

Glenn Schorr

all could, we later, assume, we the get sight bulk limited past Maybe impact. sooner the we appreciate credit the have. I much. hopefully let’s than of very Thanks

terms that thought words, about a On about In And spreads, underwriting? you need on what sheet? on capture of the spreads and previous criteria forward other its just we paid given go widen? you balance do much how you scenario for curious thinking other under didn’t does I’m this, or underwriting on how lending get risk side enough tighten, management you’re have basis? learned to a lending we’ve

Jennifer Piepszak

Sure.

I -- franchise that. our like things that, on there always would a take So, we say long-term view

changed. for It now. higher is is new not our us however, philosophy so, has And right true, of marginal activity that the cost

of served us I done And say, always appetite. manage which clients we to is And that would management, in we’ve I continue think within has always crisis. our risk And so, what carefully But, our that what that’s stay and manage we this and risk terms into a coming do we’ll close consideration. carefully. well do, to

Jamie Dimon

your add, taken done and things And like stuff lenders the market. sort that things there. of and revolvers just of spreads spreads on Think of you of actually our is wholesale then the the slightly then credit longer and new of being finance risk, view forward-looking train at tightening higher. will underwriting, a is do And and you’re spreads. I’d higher like non-bank obviously getting certain consumer people are on the The the do, different existing in lot billion, who side, stuff you side, are lending, trading, that. being like which see bilateral $XX done by leverage down, no They’re stuff and credits. are

to careful will very times price you their banks other in is an in support clients tightening eventual see What like do won’t this. are industries. Banks So, spreads. and increase gouge, see you which eventual see in you

Glenn Schorr

quantify, Okay. off. falling exit the alluded you’ve impossible help but kind more one qualify? And rate you Jen, revenues like of maybe. Could that of in know, some underwriting then I things can’t to question, you

of And two a at itself would It second has is exit rate drop, little quarters, learned been a the that revenues quarter? are expense full So, revenues like, that’s the the we’re quarter much up first facing. the how we down of looking quarter bit, quarter, a versus credit third have a ginormous tale issue but one. okay, for hard

Jennifer Piepszak

glad I’m a one. and you hard Glenn, impossible question acknowledged it’s that

there’s as but could terms be a here to impossible point now, right in what predict is reason why you guidance it we headwind, just so, of out. directional And gave

economic the on expense and growth the then get path sheet say, think And implies, absolutely that when obviously given -- you will latest to but about. So, confidence the going then, exit work. to how in upon if guidance if there. I NII, And really could say, like of depend rates I nothing and XXXX you balance XXXX. to can we about at look virus you growth is there’s think, based will the in say we on all we’ve NIR and you back with see recovery

and again, And a in all I theory, as quarters, that credit should perspective, that the end by way emerge reserves half we XXXX. equal, continued the then, see of be is into -- the could over inevitably the absorb said, works then and build us the have those year next from several to but else CECL over losses that could back of we be will behind this year, the

Operator

is Our Gerard next of RBC. from Cassidy question

Gerard Cassidy

any know of us I on Difficulty] on the year in case in that’s reserve that Can half in downturn second recovery us base year? of second on the what [Technical you’re the CECL second Difficulty] the the of half the your part quarter. outlook give you expecting [Technical kind you of gave Can building? color the the What’s recovery color you

Jennifer Piepszak

Sure.

have outlook Gerard, on I is our which it March, -- GDP and public. was the So, just -- don’t they’re of based have can was numbers unemployment. a at it to the hand, suppose don’t I hand, economists’ say, think -- end did the recovery. I have the I but to you It numbers

what Gerard, it looking absolute based your unemployment. point is GDP we’re on you unemployment, upon what’s back leaves launch at, from a but a perspective on levels of absolute still GDP and half have the think important you I is -- launch of the year, in that note, point most to below of do above -- it levels your recovery what and

we So, know our for it going time. I But thing is probably as it’s a to that recovery, it is through earlier, outlook. is said latest the half recovery scenarios. is And we in a for it where year get we of that importantly, prepared back to started. And, the the that change only as a doesn’t us said we’re of sure range back is that

not reserve preparing it we So, that while scenario may for. our the that be levels off, only the being case we’re is based that

Gerard Cassidy

book? and then I And mentioned in book, it. as size in the on us losses bridge with the the Could book, the bridge what book. know and color some you follow-up, missed the I triggered if guys just of losses on the you addressed I apologize a you then, share more bridge and this the

Jennifer Piepszak

Sure.

just start remarks, in said it’s would but I worth by -- the it I there, So prepared repeating.

Our the is book bridge about the in size of a it quarter financial crisis. was

from about $XX where down It’s yea-end. billion. slightly were So, at we it’s

in little bit a Importantly, the And we don’t performing is quarter. have second market any imminent the closing here deadlines. actually better

we’ll so the land end where quarter. So, of see far… But the at we

Gerard Cassidy

to marking Just the market… basically positions

Jennifer Piepszak

good is in… we’ve built the And news Yes.

Gerard Cassidy

[Ph] Fees.

Jennifer Piepszak

quarter. But And market the end mark at case closing as that to deadlines, they’re losses. the we’ll not those with of the realize no Jamie said, imminent it’s necessarily

Jamie Dimon

And also in perspective. put this I would just

know adults. get to bridge have We’re where you’re you a going we have quarters that money. things might lose bad some book, We loan because and

now loans, yield, and maintain We’re you et to high not the the particularly good leader have leader lending, And in in then leverage a we quarter. in we’re position. the that every leader intend And cetera.

if like you quarter. Jen -- spreads, recovery not far this this much. probably we worry look about at a we’re And so it’s So, very said, don’t

Operator

of John question McDonald Autonomous is next from Our Research.

John McDonald

Hi, Jen.

how payment Regarding over to are next balances so maybe year? card credit the seen on you this revolves, you’ve the trend spending quarters cards, card and just that and based far, draws expecting rates few on

Jennifer Piepszak

Yes. John. Hi,

March, we’re like was based at spend we’re down. month XX% talked in seeing upon So, April. down continue and of We here year-over-year, categories, in looking right was trends what different now, in aggregate that but spend the about

And that, down so, would, with know I we what we that to trend from expect would today, say outstandings here. given

John McDonald

do for be think of some while you deferrals? for the And you’re NII keep then, in add accrue about in accounting not allowed do technically haircut to You us even though might of collectible, you the accruing. help terms can you suppression kind But, you what consumer how defer?

Jennifer Piepszak

John. it got you Yes,

life but the it loan. So, over lower we the do continue to of a is yield accrue,

Operator

Our next Graseck of question is Morgan Betsy from Stanley.

Betsy Graseck

Good Hi. morning.

Jennifer Piepszak

Hi, Betsy.

Betsy Graseck

questions. to two and sense estimates. add where they their next for mentioned you thinking had those down couple the reserves the of clip the various One, your XQ were commercial XQ look is bank, I’m you the I -- XQ us just that quarters from because the are outlook segments. in of the of ratios And versus about reason timing at I I ‘XX. and estimate here. ‘XX to you when updated asking part want When just reserve And move the ‘XX I maybe know economics reserve of team between the CIB your the for had changes? could give a as ratio

move to in there an there here? adverse potentially next the we to from have between how the asset adverse in classes reserve understand different a case should -- as classes? is that ratio traject expecting the to trying likely that various higher I’m a case, change are severely So, asset reserving be Is uptick you

Jennifer Piepszak

Sure.

side on of because And specifically, you wholesale the see is So, CECL. reason dynamic the in that it’s presentation. the Betsy,

So, numbers. the you can see

net -- impact was in the adoption we wholesale release. CECL a So,

And so, that. we’ve built now

I we’re think that’s said, the all here which going forward. of want of Because be we that snap like which in kind really that the line we close macroeconomic of have impact chalk about in are and close we quarter see April, books, why about how else dynamic extraordinary at said, need when at to there. books, time transparent and need a we was outlook given why the terms some we the we beyond, you I very as But, equal, and to learn. some expect incredibly because reserving, perhaps, reserving everything these fluid. obviously we point do have the And about is it we a in to looking extraordinary need would early learn an And course they is to that programs bill -- ultimate then, because should And so, lot of the to the have to impact. second

Jamie Dimon

name just also a an also have migration one real reserve what detailed wholesale on by of downward and you company, be in reserve, overlay and of that. name, by side, like about company stuff terms at that. point name so kind by the will expect downgrades of you And review name, It by

Betsy Graseck

it’s thinking like that’s I little granular name kind commercial access Fed we that there case level adverse you the you wondering looking corporate is on Is maybe, And we to which cases specifically in like understanding commercial -- name for you’re and we the adverse have and thinking side, the line are perhaps modeling bit or to we’re severely prior adverse have is saying that’s look the side, should a what stress even So, that how anything severely bank-run what to run what that losses. at stress estate? that in Jamie, suggested around own might as real on that a something is, if you because of estate cases with that. extraordinarily coming, is on your versus that obviously the look prior stress the we back I as the But on think think be effectively severely get get the of economists bank. past? for an fair tests about, there’s this to your through test things to can what you anticipated from have a I’m basis and credit possibility about this stress see access tougher, mean have to Fed by real at different

Jamie Dimon

it be loan estate, real eventually name too. by commercial think and I will by name loan

a is going events. reason or down have dramatic loan that write of put to reserve against change a to you something a So, it you’re such is like This bad, it and believe that.

no billion growing dealt So, done with And with is are government, also doing no unemployment models and on looks like than there PPP program, rapidly. be to they ever might one dealt are it There a GDP down with billion. this that’s people unemployment be -- [ph] that $XXX before which which might have higher XX%, XX% went on where Unemployment, XX% models of income unemployment. going a part. $XXX --

that that what government like or So, something or mean does make people. card is to the for direct payments credit just going to that

So, right works the now. in all this is

the And will stimulus, we’ll we delinquencies we’ll in And credit can little charges you end of and quarter, hope recovery go can But, worst, detail going if you seen bit got give see When we’ve Like, of for We have so think and we exactly know whole a shape. second a best, in it. our the we’ll on The handle know also of model that much speak. the respect quarter. happening but the round stuff know to Company there’s what bunch you government second it. more plan so more We is we’re making serve second out. that this, too people it’s the of mistake and we’ll happens a good very as and I very clients to is, of to it. know for you’ll which fourth to report you’ve you then, quarter, are up far. card -- that the the get

Jennifer Piepszak

worst, maybe billion. XXXX the terms of helpful. in his adverse that The letter it’d Jamie then, for cost of referenced Betsy, credit And Chairman’s in than be more planning $XX had scenario extreme

look across if of is those of making that’s quarters, not had at credit just to fourth five our sure for. are quarter from that our kind scenario you then, case, clearly of prepared the And but $XX ‘XX credit we we’re billion. fourth of So, that coincidentally, we ‘XX the central the cost quarter that costs

Jamie Dimon

Reserve number required but in billion where itself back got certainly match billion I’ve billion. went revenues do $XX And expenses. reserves and -- doesn’t pro-cyclical counter like from often it, wrong. the $XX to is to and to $X you’re it

And so, it. out flaws reserving, we’d the like to have I be to in point conservative of but

Operator

KBW. of from next Brian Our is Kleinhanzl question

Brian Kleinhanzl

Can used on assuming consumers on little just model. CECL through get of of how that’s amount get maybe and mean, just and again you one maybe Just are to relief qualitative you to a questions, relief flow a how you’re corporate? sense programs bit directly give government the start Just this or some to in? a payment of government couple more I with. giving that’s payment disclosure programs that to included going all these trying factors

Jennifer Piepszak

Sure, Brian.

relief, I in will the have. about from there. we the judgment of we know the Those you there, first that So, a say, incorporated them and -- can whole pull-through then for And based programs both, relief. portfolio as macroeconomic payment who quarter, think we’ll percentage could the while applied stimulus are own our government would of people that of more Again, to past, think about get the about for and being upon the payment estimated I’m in lot then, impact our second some variables; the experience both referring and the quarter.

Jamie Dimon

the do when precisely. going me, for about out we one is of various assumptions And with to lay the Jen of And these remind we’re CECL quarter, lots CECL. this problems XX-Q the

the and these data we give It’s all a of assumptions in on it’s all bucket, drop lot spend but ever you and day like CECL, it’s data. to of did on crisis billion one three, like which that. anymore. going and the was stuff all $X the last after kind we a looks level We’re it No

Jennifer Piepszak

right. That’s

Jamie Dimon

And every differently. company does it

Jennifer Piepszak

and Yes. Q. obviously still -- have several weeks so And we before the

able And things give so, best be we’ll view to then. our on

Brian Kleinhanzl

on the is the kind post marks of to then, it And be were, reversal assuming were those of like, quarter the it marks spreads initially? gave there mean, what you bridge tighten in credit a marks dramatically I a I frame quarter mean way -- some end? loan. seems total But, So, what the would of

Jennifer Piepszak

at that’s point But, where be. this could only we there are Yes, in the quarter.

the the now, in, come right mentioned. now is of But until And market so, a all it’ll the quarter. and obviously on bit market better end performing depend have from the spreads as you

Jamie Dimon

of be quarter. couple syndicated end be may A but syndicated, of second deals might third at or hopefully, the the

Operator

from Chris next is Kotowski Oppenheimer. of Our question

Chris Kotowski

are earnings minus earnings charge-offs Difficulty]. Difficulty] [Technical -- [Technical pre-provision net

Jamie Dimon

are about saying. know can’t you -- can’t a don’t guys. I understand we word I you

Jennifer Piepszak

We hear remotely. Yes. reality we Chris, unfortunately all of of new this couldn’t is -- is work you. our our all part

Chris Kotowski

better? Sorry. Is this

Jennifer Piepszak

Yes.

Chris Kotowski

Okay.

Jamie earnings So, minus I charge-offs, my real pre Day, provision agree economic that apologies. which said net Investor the At are something earnings with. like

after reserving charged customer mean, aside all you periods curve charge-off if will curious, back with auto, pretty noise, the card grace -- or the And delinquency assumptions? does maybe cookie historic so, was relief cutter, those alter the relief, the I’m period, example, well? off does XXX is change XX-day customer and the as the always push I CECL that push days for charge-off credit Like

Jennifer Piepszak

But they program, as are because to bridge as performing people not depend these all able of under delinquent. whether the employment. ultimately it on long the may, are programs will course, back customer forbearance It to is

Chris Kotowski

Okay.

So…

Jamie Dimon

would in effect know a clearly how more is, expected? this what lot days about XX We’ll have we

Jennifer Piepszak

what CECL XX whether have Jamie’s you And next losses, that the just programs days whether if be they loan, over course delayed that we of of been would point, may reserving we learn of being with delayed -- expect to would for effective just is that. or course is, it And, losses. life can

Chris Kotowski

of terms I that [Technical Difficulty]. Okay. But, right? in Am charge-offs getting

Jennifer Piepszak

way. expectations. depend on the relief reserve losses But, we and program. the be. They quarter, going to think was really the to charge-offs don’t COVID-XX. impact able just was completely are payment ultimate the BAU, again, And be may course in quarter just it’s I a first It of all say. whether It may prior to Because or that were it why consistent normal about people charge-offs will what of reflect then remain that. importantly, think for ultimate be. first But forbearance the at it is with don’t clear say the seeing, we’re I We would under performing we in about which

Operator

is Lim, question from Our next SocGen. Andrew

Andrew Lim

Hi. my Good taking questions. Thanks morning. for

are what using if to extent to And existing gone firstly, on you do them risk-weighted extent guarantee I’m you’re are, this? what if through, loans. government your X% So, And to These refinance portfolios. loans assets have risk-weighted. on wondering, you

Jennifer Piepszak

would market Yes. response and very very to out Fed just say, speaking, unprecedented rolled And facilities, there program programs extraordinary I an that’s quickly specifically obviously on you’re conditions. large the are referring just to. what just broadly

facilities are to are intermediate these where using them programs Here, it liquidity where we we our happy flowing to to makes sense But, for and needed. the only credit leverage it’s to is clients. ensure

Andrew Lim

So, you maybe where there to part represent some risk-weighting government loans you’ve... just elaborate maybe I that. on previously bit Is uplift, capital a a if mean, where use to there’s guaranteed of

Jamie Dimon

What uplift?

Andrew Lim

down, uplift, say go capital something government for A risk-weighted Difficulty] so, your guaranteed… assets like [Technical

Jamie Dimon

Because into the a serve zero that et how that of all affect cetera. it lot is PPP the we working it we G-SIFI client like the trying balance manage on all et other what programs as does through RWA we And you to learn do. will but cetera, you goes there incorporate are and things, sell like that. run We’ll government, how it and like sheet stuff your SLR and to away. if want that And -- company those put things, of these few to

Operator

questions And this at we time. have further no

Jennifer Piepszak

Thanks, everyone.

Jamie Dimon

for time us. you with spending Thank

Operator

Thank you call. participating for in today’s

may You disconnect. now