01—Abstract
Summary
Summary of the 8-K filed July 1, 2025. Cited figures are marked; the original filing is the authoritative source.
JPMorgan Chase furnished its company-run 2025 Dodd-Frank Act Stress Test (DFAST) results under Item 7.01 (Regulation FD) on July 1, 2025.
The filing covers a nine-quarter projection (1Q25 through 1Q27) under the Federal Reserve's Supervisory Severely Adverse Scenario, which assumes a U.S. real GDP decline of 7.8%a, unemployment peaking at 10.0%, a 50% stock market decline, and a 33% house price decline. These are hypothetical estimates, not forecasts, and the Firm states that its results may differ from the Federal Reserve's own results. The Firm's Standardized CET1 ratio is projected to fall from 15.7% at 4Q24 to 14.8% at 1Q27, with a projected minimum of 13.7%.
Total cumulative projected pre-provision net revenue (PPNR) is $93.8 billionb, offset by $79.3 billion of provisions for credit losses, $12.4 billion of trading and counterparty losses, and $5.0 billion of other losses. This produces a cumulative pre-tax net loss of $3.2 billion over the nine quarters. The results show that JPMorganChase retains substantial capital headroom above the regulatory minimums even under severe stress.
The projected minimum CET1 ratio of 13.7% is well above the 4.5% regulatory minimum noted in the filing, and the Tier 1 leverage and supplementary leverage ratios (SLR) also stay above their minimums (projected minimums of 6.6% and 5.6%, respectively). Projected loan losses total $60.7 billionc, equal to a 4.7% portfolio loss rate, with domestic first-lien mortgages, commercial real estate, and credit cards among the main contributors. The Bank-level results (JPMorgan Chase Bank, N.A.) are similar, with a projected minimum CET1 ratio of 14.0% and a slightly positive pre-tax result of $1.9 billion.
For investors, the key takeaway is that the stress test results support the Firm's capital position and its ability to absorb losses in a severe downturn, which is relevant to expectations for capital return. The filing does not include the Firm's 2025 Stress Capital Buffer (SCB), which the Federal Reserve will publish by August 31, 2025.
The SCB will be the figure that determines the Firm's binding capital requirement, so investors should watch for that publication. The stress test also assumes no common dividends or share repurchases during the projection period, a standardized assumption that does not reflect management's actual capital return plans.
02—Key points
Key Highlights
- Projected stressed CET1 ratio falls from 15.7% (4Q24 actual) to 14.8% (1Q27), with a projected minimum of 13.7% under the Supervisory Severely Adverse Scenario.
- Cumulative nine-quarter PPNR of $93.8 billion is more than offset by $79.3 billion of credit loss provisions, $12.4 billion of trading and counterparty losses, and $5.0 billion of other losses, producing a projected pre-tax net loss of $3.2 billion.
- Projected cumulative loan losses total $60.7 billion, a 4.7% portfolio loss rate, with the largest projected losses in domestic first-lien mortgages, commercial real estate, and credit cards.
- Leverage metrics remain above minimums: projected minimum Tier 1 leverage ratio of 6.6% (versus 3.0%-type regulatory floors noted in the filing's SLR context) and projected minimum SLR of 5.6%, with the filing citing a 3.0% SLR minimum.
- JPMorgan Chase Bank, N.A. shows a projected minimum CET1 ratio of 14.0% and a cumulative pre-tax net income of $1.9 billion, indicating the Bank is roughly break-even on a pre-tax basis under the scenario.
- Risk-weighted assets are projected to rise from $1,757 billion to $1,856 billion, a $99 billion increase that reduces the CET1 ratio by about 0.8 percentage points.
- The filing excludes the 2025 Stress Capital Buffer, which the Federal Reserve will publish by August 31, 2025, and the Firm notes its results may differ from the Federal Reserve's own stress test results.
03—Questions
Frequently Asked Questions
What does the DFAST disclosure show about JPMorganChase's capital position under stress?
Under the Supervisory Severely Adverse Scenario, the Firm's CET1 ratio is projected to decline from 15.7% at 4Q24 to 14.8% at 1Q27, with a projected minimum of 13.7%. All projected capital ratios stay above the regulatory minimums cited in the filing, indicating substantial capital headroom under a severe hypothetical recession.
What are the main drivers of the projected decline in the CET1 ratio?
The bridge in the filing shows that provisions for credit losses reduce the CET1 ratio by about 4.5 percentage points, trading and counterparty losses by about 0.7 points, and other losses by about 0.3 points. Pre-tax PPNR adds about 5.3 points, and RWA growth reduces the ratio by about 0.8 points.
Does this filing mean JPMorgan will change its dividend or buyback plans?
Not directly. The stress test uses standardized regulatory capital action assumptions, including no common dividends and no share repurchases during the projection period. These are modeling assumptions, not management's capital return plans. The Firm's actual capital distributions will depend on the Federal Reserve's Stress Capital Buffer, which is due by August 31, 2025, and on Board decisions.
Why does the Firm say its results may differ from the Federal Reserve's stress test results?
The Federal Reserve runs its own stress tests using its own forecasting models and methodologies, which differ from the Firm's internal models. As a result, the Federal Reserve's published results for JPMorganChase may vary from those in this filing, and the Firm may not be able to fully explain the differences.
Is the stress test a forecast of JPMorganChase's expected losses?
No. The filing states that the results are hypothetical estimates under a prescribed severe scenario and do not represent the Firm's forecasts of gains, losses, PPNR, net income, capital, RWA, or capital ratios.
04—Continue