JPMorgan Chase CEO Jamie Dimon released his 47-page annual shareholder letter Saturday, sounding a notably cautious note on consumer credit even as the broader macro environment improves. Dimon revealed that subprime auto delinquencies in JPMorgan's portfolio have reached 6.4% — the highest reading since the 2009 cycle peak — and that the bank is reserving more aggressively for consumer credit losses across credit-card, auto, and unsecured lending segments through 2026.
"The American consumer remains generally healthy on aggregate, but the distribution is bifurcating in ways that warrant vigilance," Dimon wrote. "Households in the bottom 40% of the income distribution have largely depleted their pandemic-era savings buffers, are facing materially higher debt-service costs, and are relying on credit-card balances at unprecedented rates. The recent surge in subprime auto stress is a leading indicator we are watching with concern."
Reserves Climb to $24 Billion
JPMorgan disclosed that its allowance for credit losses now stands at $24.1 billion — up $2.8 billion year over year — with approximately 60% of the increase concentrated in consumer-credit categories. Card net charge-offs are tracking 4.2% versus 3.1% a year earlier, while auto loan losses have ticked up to 1.8% from 1.1%. Commercial credit metrics remain stable, the letter noted.
The cautious posture stands in contrast to the bank's broader risk-on positioning. JPMorgan's investment banking pipeline reached $7.4 billion in announced fees as of late March — the highest reading since 2021 — and the bank's asset and wealth management division reported record net inflows of $84 billion during Q1.
Dimon on Geopolitics and AI
In sections of the letter focused on geopolitics, Dimon described the Iran-Hormuz crisis as "a sobering preview of how quickly geopolitical accidents can disrupt global commerce" and called for the United States to invest more aggressively in strategic energy reserves, defense industrial capacity, and critical-mineral supply chains. He praised the recent Iran ceasefire as "a pragmatic outcome that nonetheless leaves the underlying risks unresolved."
On artificial intelligence, Dimon disclosed that JPMorgan now has more than 2,000 AI use cases in production and expects AI-driven productivity gains to deliver $4-6 billion in annual run-rate cost savings by 2027. The bank is on track to spend $19 billion on technology in 2026, with approximately 40% allocated to AI infrastructure and engineering. "AI will be as transformative as the printing press, the steam engine, electricity, computing, and the Internet — and possibly more so," Dimon wrote.