⚠ Ten Million New Card Accounts Is Also Ten Million New BorrowersModerate threat

JPMorgan Chase (JPM) — threat to the moat

A cohort acquired in a strong labour market is tested in a weak one, and the card book is the part of a bank that breaks first.

Growth in a consumer bank is growth in credit exposure, and the two arrive on the same day.

Card Services net charge-off rate3.14%Q4 20253.34%Q2 2026~3.4%2026 guidedFirmwide provision for credit losses was $14.2bn in 2025 - a benign-cycle number.
A cohort acquired in a strong labour market is tested in a weak one.

JPMorgan opened 10.4 million new credit card accounts in 20251 and expects the Card Services net charge-off rate to run near 3.4% in 20262, against 3.14% in the fourth quarter of 2025 and 3.34% in the second quarter of 20263. Firmwide provision for credit losses was $14.2 billion in 20254.

Card lending is the highest-margin and highest-loss consumer product a bank offers, and its losses are the most sensitive to unemployment of anything on the balance sheet. A cohort acquired in a strong labour market is tested in a weak one, two to three years later.

The structural defence is that JPMorgan is not reaching for growth by lowering standards — card charge-off rates in the low threes are consistent with normal, not loose, underwriting.

The genuine risk is compositional. A bank that adds ten million card accounts a year is continuously re-weighting itself toward the product that breaks first.

Watch the card charge-off rate against the unemployment rate. The gap between the two is the underwriting, and it only becomes visible when unemployment moves.

References
  1. ReportedThe firm opened 10.4 million new credit card accounts and grew wealth management households past three million in 2025.
    JPMorgan Chase & Co., fourth-quarter and full-year 2025 earnings release (Form 8-K, exhibit 99.1) — fourth-quarter net income $13.0bn ($4.63 per share), or $14.7bn ($5.23) excluding a significant item; full-year 2025 net income $57.0bn ($20.02 per share), 2025 ROE 17% and ROTCE 20%. Fourth-quarter reported revenue $45.8bn and managed revenue $46.8bn; net interest income $25.1bn, up 7%; expense $24.0bn; credit costs $4.7bn with $2.5bn of net charge-offs. CET1 Standardized 14.5% and Advanced 14.1%, total loss-absorbing capacity $564bn, Standardized RWA $2.0tn, cash and marketable securities $1.5tn; book value per share $126.99 up 9% and tangible book value per share $107.56 up 11%; Basel III CET1 capital $288bn; supplementary leverage ratio 5.8%; net payout over the last twelve months 82%. Segment returns: CCB 4Q ROE 25% and 2025 ROE 32% with a Card Services net charge-off rate of 3.14%, debit and credit card sales volume up 7% and active mobile customers up 7%; CIB 4Q ROE 19% and 2025 ROE 18%, investment banking fees down 5% year on year with a #1 ranking for global investment banking fees at 8.4% wallet share for the year, markets revenue up 17%; AWM 4Q ROE 44% and 2025 ROE 40%, AUM $4.8tn up 18%. Payments revenue reached a record $5.1bn. In 2025 the firm opened 1.7 million net new checking accounts and 10.4 million new credit card accounts and grew wealth management households to over 3 million. The significant item in 4Q25 was a $2.2bn credit reserve established for the forward purchase commitment of the Apple credit card portfolio, a $0.60 decrease in EPS. — Q4 and FY2025 · publ. 2026-01-13 · source ↗
  2. ReportedManagement expects the Card Services net charge-off rate to be approximately 3.4% in 2026.
    JPMorgan Chase & Co., Form 10-K for the fiscal year ended 31 December 2025 (SEC, CIK 19617) — total net revenue $182,447M against $177,556M in 2024 and $158,104M in 2023; total noninterest expense $95,640M; pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M and diluted EPS $20.02; return on equity 17%, return on tangible common equity 20% (22% in 2024, 21% in 2023), return on assets 1.29%, overhead ratio 52% (52% in 2024, 55% in 2023), loans-to-deposits ratio 58% (56%, 55%), liquidity coverage ratio 111%. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M (63% of total liabilities), long-term debt $435,206M, common stockholders' equity $342,393M, tangible common equity $290,018M, book value per share $126.99 and tangible book value per share $107.56; dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: Consumer & Community Banking $76,029M, $71,507M and $70,148M; Commercial & Investment Bank $78,454M, $70,114M and $64,353M; Asset & Wealth Management $24,073M, $21,578M and $19,827M across 2025, 2024 and 2023. Banking & Payments revenue by client coverage: Global Corporate Banking and Global Investment Banking $25,285M and Commercial Banking $11,851M in 2025. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M), US interest-bearing demand $321,145M at 3.26%, US savings $875,519M at 1.41%; total deposits average rate 1.80% (2024 2.08%, 2023 1.70%). Firmwide estimated uninsured deposits $1,558.6bn at 31 December 2025 and $1,414.0bn a year earlier, 'primarily reflecting wholesale operating deposits'. Basel III common equity Tier 1 capital $288bn, Standardized ratio 14.6%; the Standardized CET1 requirement including regulatory buffers was 11.5%, with a stress capital buffer of 2.5% effective through 30 September 2027 and the annual capital plan due 6 April 2026. Capital is allocated to the lines of business using standardized risk-weighted assets and the GSIB surcharge, reassessed at least annually; the enhanced supplementary leverage ratio rules were revised to set the buffer at 50% of the firm's US Method 1 GSIB surcharge. The July 2023 Basel III endgame proposal was never finalised, and in September 2025 the Federal Reserve's Vice Chair for Supervision indicated regulators may issue an updated proposal in early 2026, the timing and content of which remain uncertain. 2025 included a $588M First Republic-related gain and an estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023; 2024 revenue included a $7.9bn net gain on Visa shares. Apple Card transaction: on 7 January 2026 the firm announced Chase will become the new issuer of Apple Card, having entered a forward purchase commitment on 30 December 2025, with expected closing in approximately 24 months; the 2025 provision includes $2.2bn for lending-related commitments and the Standardized CET1 ratio decreased approximately 25 basis points. 2026 outlook: net interest income excluding Markets of approximately $95bn and adjusted expense of approximately $105bn, with a Card Services net charge-off rate of approximately 3.4%. Global workforce of 318,512 employees; JPMorgan Chase Bank, N.A. operates US branches in 48 states and Washington, D.C. Competition: 'Competitors include other banks, brokerage firms, investment banking companies, merchant banks, hedge funds, commodity trading companies, private equity firms, insurance companies, mutual fund companies, investment managers, credit card companies, mortgage banking companies, trust companies, securities processing companies, automobile financing companies, leasing companies, e-commerce and other internet-based companies, digital asset and other financial technology companies'; 'New competitors in the financial services industry continue to emerge, including firms that offer products and services solely through the internet and non-financial companies that offer products and services that disintermediate traditional banking products and services'. Risk factors warn that advocacy by non-banking competitors for exemptions from regulatory requirements could significantly disadvantage traditional financial institutions; that failing to keep pace with rapidly changing technological advances including generative AI risks losing clients and market share, with competition intensifying as new technologies become more capable and scalable; that adverse conditions could prompt outflows or cause clients to invest in products that generate lower revenue; and that the interconnectivity across credit markets increases the risk that the significant expansion of private credit could worsen losses among non-bank lenders and their borrowers, particularly if stress or defaults spread to broader funding and credit markets. — FY2025 · publ. 2026-02-13 · source ↗
  3. ReportedThe Card Services net charge-off rate was 3.14% in the fourth quarter of 2025.
    JPMorgan Chase & Co., fourth-quarter and full-year 2025 earnings release (Form 8-K, exhibit 99.1) — fourth-quarter net income $13.0bn ($4.63 per share), or $14.7bn ($5.23) excluding a significant item; full-year 2025 net income $57.0bn ($20.02 per share), 2025 ROE 17% and ROTCE 20%. Fourth-quarter reported revenue $45.8bn and managed revenue $46.8bn; net interest income $25.1bn, up 7%; expense $24.0bn; credit costs $4.7bn with $2.5bn of net charge-offs. CET1 Standardized 14.5% and Advanced 14.1%, total loss-absorbing capacity $564bn, Standardized RWA $2.0tn, cash and marketable securities $1.5tn; book value per share $126.99 up 9% and tangible book value per share $107.56 up 11%; Basel III CET1 capital $288bn; supplementary leverage ratio 5.8%; net payout over the last twelve months 82%. Segment returns: CCB 4Q ROE 25% and 2025 ROE 32% with a Card Services net charge-off rate of 3.14%, debit and credit card sales volume up 7% and active mobile customers up 7%; CIB 4Q ROE 19% and 2025 ROE 18%, investment banking fees down 5% year on year with a #1 ranking for global investment banking fees at 8.4% wallet share for the year, markets revenue up 17%; AWM 4Q ROE 44% and 2025 ROE 40%, AUM $4.8tn up 18%. Payments revenue reached a record $5.1bn. In 2025 the firm opened 1.7 million net new checking accounts and 10.4 million new credit card accounts and grew wealth management households to over 3 million. The significant item in 4Q25 was a $2.2bn credit reserve established for the forward purchase commitment of the Apple credit card portfolio, a $0.60 decrease in EPS. — Q4 and FY2025 · publ. 2026-01-13 · source ↗
  4. ReportedThe 2025 provision for credit losses was $14,212M.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
Sources
Generated September 23, 2026