JPMorgan’s Dimon Bullish on JPM Coin and Consumer Spending

JPMorgan released second-quarter earnings results Tuesday (July 15) that spotlighted a thus far negligible impact from tariffs.

Chief Financial Officer Jeremy Barnum told analysts during a conference call that consumers and commercial clients are in good financial shape, with strong credit metrics.

CEO Jamie Dimon said on the call that the bank is committed to making inroads into digital holdings, such as its proprietary JPM Coin and stablecoins in general, and open banking is a key avenue for growth.

“If you look at indicators of stress, not surprisingly, you see a little bit more stress in the lower-income bands than you see in the higher-income bands,” Barnum said during the call. “But that’s always true… And nothing there is out of line with our expectations. Our delinquency rates are also in line with expectations … all of that looks fine.”

JPMorgan’s revenues were 10% lower in the second quarter of the year but still beat expectations, coming in at $44.9 billion.

Shares were down 0.4% during early trading Tuesday.

According to an earnings presentation, net charge-offs held relatively steady, while consumer and community banking loans were 1% higher to $576.1 billion. Debit and card sales volumes were up by 7% to $487.2 billion. The company saw its active mobile customers gain 8% to 59.9 million.

Looking ahead, management said net charge-offs in the card business should be about 3.6% in the current year, which has been consistent with previous guidance.

Gauging the Regulatory Environment

Analysts asked Dimon and Barnum to take stock of the current regulatory environment.

“I think it is very important that the regulators step back and kind of look at the big picture now,” Dimon said, adding that “if you look at SLR, GSIPI, CCAR, Basel III, FSRT, the overlap, the duplication, I actually believe that you can make the system simpler, cheaper, more effective, more transparent and safer. The things like Silicon Valley Bank and First Republic did not need to happen if you just modify some things and you create more liquidity, more loans and a safer system. And that’s really what they should be looking at… I’m hoping that over time they do that.”

“And the second thing I’d add to that, which I think is even maybe more important, is they should answer the question, ‘What do they actually want in our public markets versus our private markets, etc.?’” he said. “We’ve gone from 8,000 public companies until about 25 years ago to 4,000 today… Public markets overseas have gotten smaller and smaller. Obviously, I’m not against private credit. Private credit is growing. And how do you really want to structure this?”

Looking at Stablecoins

One analyst asked Dimon: “There’s been a lot of discussion around stablecoin, how stablecoin is going to be impacting banks. And I believe you have an opinion on this. Would love to hear if you could highlight how JPM is thinking about utilizing, leveraging, competing with stablecoin and how the JPMD deposit token feeds into all of this as well?”

Dimon said the “deposit token is effectively the same thing. You’re moving money by token, you can pay interest. It’s JPMorgan deposit and stablecoins. We’re going to be involved in both JPMorgan deposit coin and stablecoins to understand it, to be good at it. We don’t know exactly, and I think they’re real, but I don’t know why you’d want a stablecoin as opposed to just payment.”

However, with a nod to FinTechs in the space, Dimon said: “These guys are very smart. They’re trying to figure out a way to create bank accounts and get into payment systems and rewards programs. We have to be cognizant of that. Way to be cognizant is to be involved. So, we’re going to be in it and learning a lot.”

Open Banking and Data Access

Dimon did not address the prospect of pricing for JPMorgan’s data access for open banking, speaking more generally of data sharing and that “we think the customer has the right to, if they want to, share their information… It should have a time limit because some [of] these things went on for years. It should not be remarketed or resold to third parties. And so, we’re kind of in favor of all that done properly.”

Charging fees reflects the fact that “it just costs a lot of money to set up the APIs … to run the system protection,” he said. “So, we just think it should be done and done right. And that’s the main part. It’s not like you can’t do it.”

He said that a liability shift must be examined as “I don’t think JPMorgan should be responsible if you’ve given your bank passcodes to third parties who market and do a whole bunch of stuff with it, and then you get scammed or fraud through them. They should be responsible. And we want real clarity about that.”

Looking at the more traditional business lines, Dimon took note of the potential of middle-market firms for lending and payment services, which is a business that will grow no matter what the short-term macro-environment might be.