JPMORGAN CHASE & CO
For the period ended Dec 31, 2025. Filed Feb 13, 2026.
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FY2025 · Filed Feb 13, 2026
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Allowance for Credit Losses
The Firm’s allowance for credit losses represents management's estimate of expected credit losses over the remaining expected life of the Firm's financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The Firm's allowance for credit losses generally consists of:
the allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated) and is presented separately on the Consolidated balance sheets,
the allowance for lending-related commitments, which is reflected in accounts payable and other liabilities on the Consolidated balance sheets, and
the allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.
Discussion of changes in the allowance
The allowance for credit losses as of December 31, 2025 was $31.2 billion, reflecting a net addition of $4.4 billion from December 31, 2024.
The net addition to the allowance for credit losses included:
$3.3 billion inconsumer, driven by $2.2 billion related to the Apple Card transaction, loan growth in Card Services and the impact of changes in the Firm's weighted-average macroeconomic outlook, partially offset by reduced borrower uncertainty, and
$1.1 billion inwholesale, driven by net increases in the loan and lending-related commitment portfolios, an update to loss assumptions on certain leveraged loans, and net changes in credit quality of client-specific exposures, partially offset by the impact of changes in the Firm's weighted-average macroeconomic outlook and a reduction due to the impact of charge-offs.
The Firm's qualitative adjustments and its weighted-average macroeconomic outlook continued to include additional weight placed on the adverse scenarios to reflect ongoing uncertainties and downside risks related to the geopolitical and macroeconomic environment. During 2025, the Firm further increased the weight placed on the adverse scenarios.
The Firm's allowance for credit losses is estimated using a weighted average of five internally developed macroeconomic scenarios. The adverse scenarios incorporate more punitive macroeconomic factors than the central case assumptions provided in the following table, resulting in:
a weighted average U.S. unemployment rate peaking at 5.8% in the fourth quarter of 2026, and
a weighted average U.S. real GDP level that is 2.1% lower than the central case at the end of the second quarter of 2027.
The following table presents the Firm’s central case assumptions for the periods presented:
| Central case assumptions at December 31, 2025 | |||
|---|---|---|---|
| 2Q26 | 4Q26 | 2Q27 | |
| U.S. unemployment rate(a) | 4.6% | 4.4% | 4.2% |
| YoY growth in U.S. real GDP(b) | 2.0% | 1.8% | 1.9% |
| Central case assumptions at December 31, 2024 | |||
|---|---|---|---|
| 2Q25 | 4Q25 | 2Q26 | |
| U.S. unemployment rate(a) | 4.5% | 4.3% | 4.3% |
| YoY growth in U.S. real GDP(b) | 2.0% | 1.9% | 1.8% |
(a)Reflects quarterly average of forecasted U.S. unemployment rate.
(b)The year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percentage change in U.S. real GDP levels from the prior year.
Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.
Refer to Consumer Credit Portfolio on pages 112–117, Wholesale Credit Portfolio on pages 118–128 and Note 12 for additional information on the consumer and wholesale credit portfolios.
Refer to Critical Accounting Estimates Used by the Firm on pages 154–157 for further information on the allowance for credit losses and related management judgments.
| Allowance for credit losses and related information | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||
| Year ended December 31, | Consumer, excluding credit card | Credit card | Wholesale | Total | Consumer, excluding credit card | Credit card | Wholesale | Total |
| (in millions, except ratios) | ||||||||
| Allowance for loan losses | ||||||||
| Beginning balance at January 1, | $1,807 | $14,600 | $7,938 | $24,345 | $1,856 | $12,450 | $8,114 | $22,420 |
| Gross charge-offs | 1,089 | 9,164 | 1,787 | 12,040 | 1,299 | 8,198 | 1,022 | 10,519 |
| Gross recoveries collected | (510) | (1,492) | (189) | (2,191) | (625) | (1,056) | (200) | (1,881) |
| Net charge-offs | 579 | 7,672 | 1,598 | 9,849 | 674 | 7,142 | 822 | 8,638 |
| Provision for loan losses | 692 | 8,629 | 1,943 | 11,264 | 624 | 9,292 | 578 | 10,494 |
| Other | — | — | 5 | 5 | 1 | — | 68 | 69 |
| Ending balance at December 31, | $1,920 | $15,557 | $8,288 | $25,765 | $1,807 | $14,600 | $7,938 | $24,345 |
| Allowance for lending-related commitments | ||||||||
| Beginning balance at January 1, | $82 | $— | $2,019 | $2,101 | $75 | $— | $1,899 | $1,974 |
| Provision for lending-related commitments | 1 | 2,200(d) | 768 | 2,969 | 7 | — | 121 | 128 |
| Other | — | — | 1 | 1 | — | — | (1) | (1) |
| Ending balance at December 31, | $83 | $2,200 | $2,788 | $5,071 | $82 | $— | $2,019 | $2,101 |
| Impairment methodology | ||||||||
| Asset-specific(a) | $(647) | $— | $707 | $60 | $(728) | $— | $526 | $(202) |
| Portfolio-based | 2,567 | 15,557 | 7,581 | 25,705 | 2,535 | 14,600 | 7,412 | 24,547 |
| Total allowance for loan losses | $1,920 | $15,557 | $8,288 | $25,765 | $1,807 | $14,600 | $7,938 | $24,345 |
| Impairment methodology | ||||||||
| Asset-specific | $— | $— | $119 | $119 | $— | $— | $109 | $109 |
| Portfolio-based | 83 | 2,200(d) | 2,669 | 4,952 | 82 | — | 1,910 | 1,992 |
| Total allowance for lending-related commitments | $83 | $2,200 | $2,788 | $5,071 | $82 | $— | $2,019 | $2,101 |
| Total allowance for investment securities | NA | NA | NA | $106 | NA | NA | NA | $152 |
| Total allowance for credit losses(b) | $2,003 | $17,757 | $11,076 | $30,942 | $1,889 | $14,600 | $9,957 | $26,598 |
| Memo: | ||||||||
| Retained loans, end of period | $368,741 | $247,797 | $792,367 | $1,408,905 | $376,334 | $232,860 | $690,396 | $1,299,590 |
| Retained loans, average | 371,238 | 231,644 | 732,793 | 1,335,675 | 384,001 | 214,033 | 673,310 | 1,271,344 |
| Credit ratios | ||||||||
| Allowance for loan losses to retained loans | 0.52% | 6.28% | 1.05% | 1.83% | 0.48% | 6.27% | 1.15% | 1.87% |
| Allowance for loan losses to retained nonaccrual loans(c) | 50 | NA | 188 | 311 | 56 | NA | 201 | 339 |
| Allowance for loan losses to retained nonaccrual loans excluding credit card | 50 | NA | 188 | 123 | 56 | NA | 201 | 136 |
| Net charge-off rates | 0.16 | 3.31 | 0.22 | 0.74 | 0.18 | 3.34 | 0.12 | 0.68 |
(a)Includes collateral-dependent loans, including those for which foreclosure is deemed probable, and nonaccrual risk-rated loans.
(b)At December 31, 2025 and 2024, in addition to the allowance for credit losses in the table above, the Firm also had an allowance for credit losses of $288 million and $268 million, respectively, associated with certain accounts receivable in CIB.
(c)The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.
(d)Represents the impact of the Apple Card transaction.
Allocation of allowance for loan losses
The table below presents a breakdown of the allowance for loan losses by loan class. Refer to Note 12 for further information on loan classes.
| 2025 | 2024 | |||
|---|---|---|---|---|
| December 31,(in millions, except ratios) | Allowance for loan losses | % of retained loans to total retained loans | Allowance for loan losses | % of retained loans to total retained loans |
| Residential real estate | $869 | 21% | $666 | 24% |
| Auto and other | 1,051 | 5 | 1,141 | 5 |
| Consumer, excluding credit card | 1,920 | 26 | 1,807 | 29 |
| Credit card | 15,557 | 18 | 14,600 | 18 |
| Total consumer | 17,477 | 44 | 16,407 | 47 |
| Secured by real estate | 2,226 | 12 | 2,978 | 12 |
| Commercial and industrial | 4,240 | 12 | 3,350 | 13 |
| Other | 1,822 | 32 | 1,610 | 28 |
| Total wholesale | 8,288 | 56 | 7,938 | 53 |
| Total | $25,765 | 100% | $24,345 | 100% |
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