JPMorgan’s Quarter Shows the Rate Engine Is Leveling Off—And the Fee Machine Is Taking Over

JPMorgan Chase opened bank-earnings season with a result that looked familiar on the surface and subtly different under the hood. The nation’s largest bank posted third‑quarter 2025 net income of $14.4 billion, or $5.07 per share, as total managed revenue rose 9% to $47.1 billion. The topline beat landed alongside a 2% rise in net interest income (NII) to $24.1 billion, but the more telling story was the resurgence of fee businesses: markets revenue jumped 25% to a record third‑quarter ~$8.9 billion, while investment‑banking fees climbed 16%. In other words, the rate tailwind is fading, and JPMorgan’s fee engine is doing more of the heavy lifting again. (sec.gov)

Management leaned into that narrative with a modest NII raise for the full year and a nod to lower‑rate headwinds. The bank now expects roughly $95.8 billion of 2025 NII (up from $95.5 billion previously) and guided fourth‑quarter NII excluding markets to about $23.5 billion. Looking out to 2026, it signaled NII excluding markets around $95 billion—a planning marker that implies less growth from rates and more from balance‑sheet mix and fees. Shares were little changed before the bell. (reuters.com)

The quarter also showed the bite of normalization in consumer credit and a one‑off blemish in wholesale lending. Firmwide credit costs were $3.4 billion, including $2.6 billion of net charge‑offs and an $810 million net reserve build. Consumer & Community Banking (CCB) posted a Card Services net charge‑off rate of 3.15%. In the Commercial & Investment Bank (CIB), provisions included charge‑offs tied to what management described as borrower‑related collateral irregularities in certain secured lending facilities; on a separate call with reporters, CEO Jamie Dimon acknowledged a $170 million charge‑off related to bankrupt auto dealer Tricolor as “not our finest moment.” (sec.gov)

Rates helped—but not like they used to. NII excluding markets was essentially flat year‑over‑year as lower rates and deposit‑margin compression pressed the core spread engine. Offsetting forces were higher revolving balances in Card Services and higher wholesale deposit balances. That mix shift is deliberate: JPMorgan has been preparing for a less generous rate backdrop and, as footnotes remind, a funds‑transfer‑pricing change last year moved more of the consumer deposit benefit into CCB and out of Corporate, complicating simple segment‑to‑segment comparisons. (sec.gov)

Against that, the fee machine is humming. Markets revenue hit a third‑quarter record, with Fixed Income up 21% (rates, credit and securitized products strong) and Equities up 33% (particularly Prime). Investment‑banking fees climbed 16% across products as the deal calendar reopened—an area where JPMorgan also asserted #1 global wallet share year‑to‑date at 8.7%. This is the healthier kind of beat for a late‑cycle bank: less about earning more on deposits, more about earning more for clients. (sec.gov)

On Main Street, CCB’s net revenue rose 9% to $19.5 billion and net income increased 24% to $5.0 billion. Debit and credit card sales volume grew 9%, while active mobile customers rose 7%. The consumer is still spending—but losses are normalizing: the card net charge‑off rate of 3.15% and a $575 million reserve build in CCB (largely Card Services) underline that the pandemic‑era cushion is gone. (sec.gov)

On Wall Street, the CIB delivered $19.9 billion of net revenue (+17%) and $6.9 billion of net income (+21%). Markets carried the quarter, but Payments also grew 13% (up 6% excluding equity‑investment marks) even as deposit margins compressed, a reminder that payments scale and client balances still matter when spreads thin. Asset & Wealth Management posted $6.1 billion of revenue (+12%) and $1.7 billion of net income (+23%), with AUM up 18% to $4.6 trillion; average deposits in AWM fell 3% sequentially, consistent with clients reallocating toward markets. (sec.gov)

The $810 million reserve build was broad‑based—$608 million in Consumer, $205 million in Wholesale—and net charge‑offs rose by roughly half a billion dollars from a year ago. In the CIB, the provision included charge‑offs tied to “borrower‑related collateral irregularities” in secured lending; separately, management acknowledged a $170 million charge‑off associated with the bankruptcy of auto dealer Tricolor. Isolated, yes—but after an 18‑month stretch of credit calm, it is a timely reminder that idiosyncratic risk tends to surface late in cycles. (sec.gov)

Expenses also deserve attention. Noninterest expense rose 8% year‑over‑year to $24.3 billion, driven by higher compensation (including revenue‑related pay and front‑office growth), brokerage and distribution costs, auto lease depreciation, and marketing. The managed overhead ratio stayed at 52%, but with fee businesses re‑accelerating, discipline on costs will determine how much of every incremental dollar drops to the bottom line. (sec.gov)

JPMorgan’s fortress remains overbuilt by design. The bank finished the quarter with a 14.8% Standardized CET1 ratio (Advanced 14.9%), comfortably above its ~11.5% requirement, and returned $12.1 billion to shareholders via $8.0 billion of buybacks and a $1.50 dividend. That capacity reflects both earnings power and a regulatory backdrop that—while still evolving—has not constrained the industry leader’s ability to shrink share count. (sec.gov)

The capital story also intersects with strategy. On Monday, JPMorgan unveiled a 10‑year, $1.5 trillion “Security and Resiliency Initiative,” including up to $10 billion of direct equity and venture investments in U.S. companies across defense, energy resilience, supply chains and frontier technologies. The program signals where the deal and lending pipelines could swell next—and where the bank intends to put its balance sheet and fee franchises to work, regardless of the rate cycle. (jpmorganchase.com)

NII glidepath: Management just nudged 2025 higher and sketched a 2026 ex‑Markets marker. The test is whether deposit costs keep easing fast enough to offset lower asset yields without sacrificing growth in core checking and wealth balances. (reuters.com)

Fee durability: Markets had a standout quarter and banking is healing, but investors will want evidence of staying power as the calendar rolls into 2026. Watch equities prime and securitized products on the trading side, plus ECM/M&A conversion from the fall pipeline. (sec.gov)

Credit normalization: Card losses are back to pre‑pandemic‑like territory, and isolated wholesale hiccups have reappeared. The pace of reserve builds—and any additional collateral‑related surprises—will shape how much of JPMorgan’s operating leverage reaches EPS. (sec.gov)