01—Abstract
Summary
Summary of the 8-K filed May 20, 2024. Cited figures are marked; the original filing is the authoritative source.
JPMorgan Chase held its 2024 Investor Day on May 20, 2024, and furnished the presentation slides under Item 7.01 of Form 8-K (Regulation FD).
The materials are forward-looking guidance rather than a financial results release. Management reaffirmed a ~17% through-the-cycle ROTCE target, assuming a reasonable Basel III Endgame outcome, and guided 2024 net interest income (ex-Markets) to ~$91Ba and adjusted expense to ~$92B, the latter raised by a $1B Foundation contribution. Management also said NII is under pressure from expected rate cuts, deposit mix shift, and normalizing credit, and that the firm is prepared for a range of macro and regulatory outcomes.
On capital, management said it expects 'broad and material changes' to capital requirements under the proposed Basel III Endgame rule. It illustrated a scenario with roughly a 50% (~$250Bb) RWA reduction from the proposal, while noting that the final outcome is highly uncertain. Estimated excess capital was framed as a range, and management signaled a step-up in buybacks versus recent modest pace, while remaining cautious.
The Card Services net charge-off guidance for 2024 is ~3.4%, and the firm says its reserves are built for a peak unemployment rate of 5.4%. The Investor Day also highlighted growth initiatives: deposit share gains (retail deposit share 11.3%, targeting 15% nationally), Card market share gains, Connected Commerce (targeting ~$30Bc in 2025 volume), CIB's reorganization into Global Banking, and the Asset & Wealth Management franchise.
The presentation is primarily a strategic and guidance update. It is not a formal earnings release, and most figures are management estimates subject to forward-looking risks.
02—Key points
Key Highlights
- Reaffirmed ~17% through-the-cycle ROTCE target, conditioned on a reasonable Basel III Endgame outcome; 2024 medium-term guidance includes 25%+ ROE for AWM.
- 2024 NII ex-Markets outlook of ~$91B, up from ~$90B prior, reflecting fewer assumed rate cuts (4 fewer than at 4Q23 earnings) and better deposit repricing performance.
- 2024 adjusted expense outlook of ~$92B, increased to include a $1B pre-funded Foundation contribution; 2024 technology expense outlook of ~$17B.
- Capital: management expects 'broad and material changes' to Basel III Endgame; an illustrative scenario implies a ~50% (~$250B) RWA reduction versus the NPR, with final outcome highly uncertain.
- Credit: 2024 Card Services NCO rate guided to ~3.4% (vs. 2.45% in 2023); firmwide reserves sized for a peak unemployment rate of 5.4% in 1Q25.
- Deposit and franchise: #1 U.S. retail deposit share at 11.3% (+40bps YoY), with the firm targeting 15% national share; Card sales share 22.9%, outstandings share 16.9%.
- Structural change: Commercial & Investment Bank reorganized into Global Banking, Markets, Securities Services and Payments; management noted ~$64B CIB revenue in 2023 and a 15% adjusted ROE.
03—Questions
Frequently Asked Questions
Did JPMorgan change its financial guidance at the Investor Day?
The Investor Day reaffirmed the ~17% through-the-cycle ROTCE target and the 25%+ AWM ROE target. It updated 2024 outlook: NII ex-Markets is now ~$91B (from ~$90B) and adjusted expense is ~$92B (raised for a $1B Foundation contribution). Management noted that results depend on the final regulatory outcome and macro conditions.
What does the Basel III Endgame outcome mean for capital and buybacks?
Management said the final rule could bring broad and material changes to capital requirements. Its illustrative scenario assumes roughly a 50% RWA reduction versus the proposal, but the range of outcomes is wide. Management said excess capital supports larger buybacks than in recent quarters, while remaining cautious about future GSIB and SCB changes.
How is credit quality expected to evolve?
Card Services net charge-off rate is guided to ~3.4% for 2024, up from 2.45% in 2023 but below the 2019 level of 3.10% (which was pre-pandemic) only in part; management says reserves are built for peak unemployment of 5.4%. Consumer balance sheets have normalized, but management is watching lower-income consumers whose income has not kept pace with inflation.
What are the main risks to net interest income?
Management flagged rate cuts, continued deposit mix shift toward higher-yielding products, deposit repricing pressure, and credit normalization as headwinds. Its NII guidance assumes 6 rate cuts in 2024 at the 4Q23 call versus fewer now, with a range of macro scenarios presented.
Is this 8-K a formal earnings release?
No. The filing furnishes Investor Day slides under Item 7.01 (Regulation FD) and states the information is not 'filed' under Section 18 of the Exchange Act. The slides contain forward-looking statements, non-GAAP measures and management estimates, so investors should consult the 10-Q and 10-K for audited results.
04—Continue