JPMorgan Chase passes 2026 stress test with 12.4% CET1 minimum under severe recession

JPMorgan Chase disclosed its 2026 annual Dodd-Frank Act stress test results under the Supervisory Severely Adverse Scenario. The firm's CET1 ratio would decline from 14.6% at 4Q25 to a minimum of 12.4% during the nine-quarter projection period (1Q26-1Q28), ending at 14.4% in 1Q28. This minimum remains well above the 4.5% regulatory minimum.

Under the severely adverse scenario, JPMorgan Chase projects cumulative nine-quarter losses totaling $124.5 billion, comprising $95.6 billion in credit loss provisions, $10.9 billion in trading and counterparty losses, $17.8 billion in other losses, and $0.2 billion in investment securities credit losses. These hypothetical losses would be partially offset by $135.9 billion in pre-provision net revenue, resulting in $11.4 billion net income before taxes.

The Federal Reserve's Supervisory Severely Adverse Scenario assumes a severe global recession with U.S. GDP declining 4.6%, unemployment reaching 10%, stock markets falling 58%, and housing prices dropping 30%. The scenario is hypothetical and does not represent JPMorgan Chase's forecast of actual expected outcomes.

The stress test projects $70.2 billion in cumulative loan losses over nine quarters, representing a 5.0% portfolio loss rate. Credit cards would experience the highest losses at $27.1 billion (12.1% loss rate), followed by commercial & industrial loans at $26.2 billion (12.8% loss rate) and commercial real estate at $6.9 billion (4.5% loss rate). First lien mortgages would see relatively modest losses of $1.4 billion (0.5% loss rate).

JPMorgan Chase disclosed the results of its internal stress test required under the Dodd-Frank Act for both the parent company and its national bank subsidiary. The stress test evaluates the bank's capital adequacy under adverse economic scenarios. The actual results are contained in Exhibit 99, which is furnished but not filed with the SEC.