Q3 2026 earnings breakdown
JPMorgan Chase, the largest bank in the US, reported its Q3 numbers on Tuesday. Earnings per share came in at $5.57. Analysts had expected about $5.85 to $5.90. It is the bank’s first miss in 17 quarters, which is why it made headlines.
But the bank did not shrink. Net income rose 6% from last year to $15.3 billion and revenue rose 8% to $50.2 billion. Each of the three customer facing businesses grew profit by double digits. The fourth segment, Corporate, swung to a loss, and that is most of the story.
| Metric | Q3 2026 | Q2 2026 | Q3 2025 | YoY | QoQ |
| Net revenue (reported) | $50.2B | $57.3B | $46.4B | +8% | -13% |
| Noninterest expense | $27.3B | $27.3B | $24.3B | +12% | Flat |
| Provision for credit losses | $2.7B | $2.5B | $3.4B | -19% | +9% |
| Net income | $15.3B | $21.2B | $14.4B | +6% | -28% |
| EPS | $5.57 | $7.70 | $5.07 | +10% | -28% |
| ROE | 17% | 24% | 17% | Flat | -7 pts |
| ROTCE | 20% | 29% | 20% | Flat | -9 pts |
Shares swung through the day and closed about 0.9% lower at $331.43.Strip out the 658 million of securities (498 million after tax) and net income is $15.8 billion with EPS of $5.75. That is still 10 to 15 cents short of estimates, so the miss is real, just smaller.
Most of the drop from Q2 sits in one line
Net income fell $5.85 billion from Q2, which was a record quarter at $21.2 billion. Of that fall, $4.66 billion came from Corporate, the catch all segment that holds treasury and investment portfolio items. In Q2 it earned $4.2 billion, helped by a one time gain on the bank’s Visa stake. In Q3 it lost $455 million.
The three businesses that deal with customers, consumer banking, the investment bank and asset management, earned about $15.8 billion together. That is only around $1.2 billion lower than Q2.
The same pattern shows up year on year. Add up the three businesses and profit grew from $13.6 billion to $15.8 billion, up about 16%. The firm as a whole grew only 6%, because Corporate went from a $825 million profit to a $455 million loss. Two things caused that swing. The bank booked $658 million of investment securities losses as bond prices fell, against a $105 million gain a year ago. And net interest income at Corporate fell $737 million, because rates are lower than they were a year earlier.
The investment bank had a great year and a softer quarter
The Commercial & Investment Bank (CIB) is the segment investors watch most on days like this. Revenue was $22.7 billion, up 14% on last year, and net income was $8.2 billion, up 20%. Compared with Q2 though, revenue fell 9% and profit fell 15%.
Inside it, the two trading desks went in opposite directions.
- Equity markets earned $5.0 billion, up 49%, with prime brokerage and derivatives doing the heavy lifting. Prime brokerage is the business of financing hedge fund positions, so strong numbers there point to clients that were active and willing to use leverage. That fits with the latest BofA fund manager survey, where 37% of managers were overweight tech, the highest since August 2020.
- Fixed income markets earned $5.4 billion, down 4%. Commodities, rates, credit and public finance were all lower. Currencies and emerging markets were the only bright spot.
The same bond selloff that hurt the fixed income desk also caused the securities losses in Corporate. One event, two line items.
The bank also told investors in September that investment banking fees and markets revenue should grow in the mid to high teens. They grew 14% and 15%. Both landed at the low end of that range, so numbers that look healthy on their own read as a shortfall against the bank’s own promise.
Why deals slowed
Investment banking fees were $3.0 billion, up 14% YoY but down 8% from Q2, led by advisory fees. JPMorgan still ranks first globally in investment banking fees with a 9.2% wallet share this year.
The slowdown was industry wide:
- Goldman Sachs: fees up 21% YoY, down 5% QoQ
- Wells Fargo: down 5% QoQ
- Citigroup: down 13% QoQ
The reason is price. Companies that started IPO conversations in May and June had a valuation in mind. By September, buyers were offering 10% to 15% less, and many issuers decided to wait. After a strong start to the year, including the SpaceX listing, the IPO market went quiet in the second half of September. JPMorgan’s CFO said he expects deals to be delayed, not cancelled, and called the pipeline very strong. If so, the fees move into later quarters instead of disappearing.
| Segment | Revenue Q3 | YoY | QoQ | Net income Q3 | YoY | QoQ |
| Consumer & Community Banking | $21.2B | +9% | +4% | $5.7B | +13% | +7% |
| Commercial & Investment Bank | $22.7B | +14% | -9% | $8.2B | +20% | -15% |
| Asset & Wealth Management | $6.9B | +14% | +1% | $1.8B | +11% | -6% |
| Corporate | $93M | -95% | -98% | Loss of $455M | Was $825M profit | Was $4.2B profit |
The other two segments had a clean quarter. Consumer banking added over 650,000 net new checking accounts, card sales volume rose 10% and Card Services & Auto revenue rose 15% on higher balances and better yields. Asset management saw $263 billion of client net inflows and assets under management rose 13% to $5.2 trillion.
Costs grew faster than revenue
Expenses were $27.3 billion, up 12%, while revenue grew 8%. The overhead ratio, which is the share of revenue spent on costs, was 54%, up from about 52% a year ago. The drivers were higher compensation (including more front office employees and revenue linked pay), brokerage and distribution fees, marketing and technology.
This is why profit grew 6% against revenue growth of 8%. EPS grew 10% because there are fewer shares outstanding than a year ago.
The bank also raised its full year expense forecast to about $108.6 billion from $107.5 billion, saying revenue is running ahead of plan. The catch is that pay linked to revenue falls when revenue falls, but hiring, technology and marketing are harder to cut. If dealmaking stays slow, that gap shows up in profit.
Lending grew, but not in the consumer book
Average loans were $1.6 trillion, up 10% on last year. The split is the interesting part.
| Segment | Average loans YoY | QoQ |
| Consumer & Community Banking | +2% | +1% |
| CIB Banking & Payments | +11% | Flat |
| Asset & Wealth Management | +20% | +6% |
| Firm | +10% | +2% |
Loan growth is coming from companies and wealthy clients, not households. Card balances grew about 7%, but mortgages are weak, with Home Lending revenue down 3% on lower production.
Net interest income, the gap between what the bank earns on loans and pays on deposits, was $27.1 billion, up 13%, or $24.7 billion excluding markets, up 6%. The bank raised its full year guidance to about $106.2 billion, from $105.5 billion, and about $97.2 billion excluding markets, from $96.5 billion. It also gave a first estimate of about $107 billion for 2027 excluding markets.
The reserve build moved from consumers to companies
The quiet line in this release is credit. Credit costs were $2.7 billion. Net charge-offs, the loans written off as unrecoverable, were $2.2 billion, down $389 million from last year. The bank also added $539 million to its reserves, against $810 million a year ago.
Where the reserves went matters:
- Consumer banking added just $50 million to reserves, against $575 million a year ago. The Card Services net charge-off rate was 2.91%, down from 3.15%.
- The investment bank added $452 million, against $242 million a year ago. Its provision was up 86% from Q2.
So the bank is setting aside more against corporate loans and less against consumer ones. That matches what its CEO has been saying all year, that lenders are complacent and losses in the next credit downturn could be worse than expected. The outside data points the same way:
- Leveraged loans trading below 60 cents on the dollar are at their highest level since March 2020, with tech companies making up a large share. JPMorgan’s own strategists expect defaults to rise in 2027.
- The 10 year Treasury yield is above any level seen since 2002, after a bond selloff linked to the Iran conflict and heavy capital demand from AI.
- The Fed raised rates on September 16, the first hike since 2023.
The household picture is mixed. Wells Fargo’s CFO says he sees no cracks in delinquencies despite higher gas prices. But New York Fed data shows new delinquencies on auto loans and cards are still elevated, and a survey found more than half of consumers use credit cards for essentials. September payrolls grew by only 29,000 against an expected 84,000, unemployment rose to 4.2% and 30 year mortgage rates crossed 7%.
Charge-offs are a lagging number. They look good while borrowers are still being rolled over, and worsen after stress has built up. A clean consumer book this quarter does not rule out problems later.
Buybacks shrank while capital stayed high
The bank cut its net share buybacks to $664 million this quarter, while keeping the dividend at $1.65 per share, or $4.4 billion. Its CET1 capital ratio, a measure of the cushion against losses, was 13.9% on the standardised approach and 14.1% on the advanced approach. Book value per share rose 6% to $132.30 and tangible book value per share rose 7% to $112.64.
The bank says it will deploy capital over time at attractive returns and put investing in the business and serving clients first. With yields at multi decade highs and credit risks building, holding on to capital instead of buying back stock is a cautious call.
AI exposure is small, for now
The CFO said the bank’s exposure to AI companies is modest compared with its total wholesale exposure, though a sharp change in sentiment could still affect it. The bank is testing several AI tools and use cases, and the benefits take time to show up in the numbers.
What to track next quarter
- Do delayed deals close in Q4? The pipeline is described as strong, but activity slowed in late September.
- Markets revenue. The bank gave no Q4 guidance and said Q4 is usually seasonally weaker.
- Wholesale reserves. If the build continues, watch leveraged loan defaults.
- Costs against revenue. The expense guide was raised to about $108.6 billion.
- Loan demand. Higher borrowing costs could slow the corporate lending that is driving growth.
This blog is for educational purposes only and is not investment advice.