In 2023, the globe grappled with a slew of formidable hurdles — from the relentless conflict and upheaval in the Middle East and Ukraine to surging terrorism and intensifying geopolitical friction, notably with China. Economic uncertainty sent ripples worldwide, marked by soaring energy and food costs, persistent inflation, and shaky markets. While these crises have undeniable impacts on our enterprise, workforce, clientele, and the nations where we operate, the broader human toll — the staggering hardships endured by Ukrainians, the spiraling calamity in the Middle East, and the reshaping of global power dynamics — weighs far heavier.
The Shifting Sands of American Leadership and Western Unity
America’s position on the world stage faces pressure — externally from competing nations and internally from a deeply divided electorate. Bridging our differences and forging alliances with fellow Western democracies is pivotal. Amidst these turbulent times, safeguarding our freedoms, including free enterprise, must take precedence. America, “conceived in liberty and dedicated to the proposition that all men are created equal,” continues to shine as a beacon of hope globally. JPMorgan Chase, with its legacy of transcending borders, remains committed to ensuring a robust and secure global economy.
Economic Resilience Amidst Uncertainty
Despite last year’s regional banking shocks and a volatile macroeconomic backdrop, the U.S. economy demonstrated notable resilience. Consumer spending remains solid, and markets anticipate a gentle landing. However, this growth leans heavily on historic government deficits and stimulus efforts. The transition to a greener economy, overhaul of supply chains, elevated military budgets, and ballooning healthcare expenses signal persistent inflation and potentially steeper interest rates than anticipated. Moreover, quantitative tightening is draining liquidity — over $900 billion annually — a phenomenon we’ve yet to fully experience at this scale. Conflicts in Ukraine and the Middle East continue to threaten the stability of energy, food supplies, migration flows, and international relations, compelling caution.
By the numbers: In 2023, JPMorgan Chase crossed the $160 billion revenue mark, boasting a net income nearing $50 billion and an impressive 21% return on tangible common equity. Our robust dividend hikes and a fortress-like balance sheet underscore our unwavering financial strength.
JPMorgan Chase’s 2023 Milestones: Growth and Client Commitment
Our firm hit new heights for the sixth straight year, shattering records across all business lines. Consumer & Community Banking secured top spots in retail deposits and credit card metrics, welcoming nearly 3.6 million new customers. The Corporate & Investment Bank reinforced its leadership in Investment Banking and Markets, growing market share by over 100 basis points. Commercial Banking doubled new client relationships, and Asset & Wealth Management recorded astounding net inflows of $490 billion, a 20% leap from previous records.
Credit and capital provision topped $2.3 trillion globally, facilitating transactions in nearly $10 trillion daily across 120+ currencies and 160 countries, while safeguarding assets exceeding $32 trillion. The First Republic Bank acquisition bolstered U.S. banking stability, providing a secure haven for over 500,000 customers.
Driving Inclusive Prosperity and Corporate Responsibility
Our unwavering dedication to corporate citizenship translates into tangible initiatives — from upskilling programs worldwide to financing affordable housing and small business growth. Urban revitalization projects, like those in Detroit, exemplify how partnerships between business and government can tackle systemic challenges.
Steadfast Principles That Define Us
Since my tenure began in 2000, our enduring commitment to clients, communities, and countries has been unshakeable. Our financial discipline, innovation investment, and talent development are pillars of this consistency. We recognize that the value we create extends well beyond numbers—our shareholders include millions of everyday people, veterans, educators, first responders, healthcare workers, retirees, and families striving for better futures.
- Human Impact Matters: Ownership of JPMorgan Chase shares by individuals across American communities embodies deep societal ties.
- Healthy Companies Build Value: Nurturing customers, employees, and communities is essential for sustainable shareholder returns.
- Long-Term Progress Over Short-Term Fluctuations: We gauge success by enduring growth and resilience, as reflected in our stock’s superior performance versus major indices.
- Fortress Balance Sheet and Culture: Our guiding strategies foster financial strength, risk management, and customer service excellence.
- Focused Business Model: Unlike a sprawling conglomerate, our interconnected businesses drive exceptional returns amid fierce competition.
- Reliable in Tough Times: We pledge to be a pillar of strength for clients and nations alike, especially during crises.
- Partnering with the U.S. Government: Recognizing shared responsibility, we contribute significantly in taxes and regulatory compliance worldwide.
- People Are Our Foundation: The skills, integrity, and dedication of our workforce fuel our ongoing achievements.
Our pride in JPMorgan Chase’s resilience and our global team’s accomplishments is immense. We remain steadfast in banking’s vital community role — empowering people, businesses, schools, hospitals, and cities across the globe. Two decades post-merger, our success is a testament to abiding values.
Reflecting on the 20-Year Bank One/JPMorgan Chase Merger
By 2004, JPMorgan Chase was the product of amalgamations of titans like Chase Manhattan, Manufacturers Hanover, Chemical Banking, and J.P. Morgan & Company — some dating back to the late 1700s.
Bank One’s rapid expansion through acquisitions, including the pivotal 1998 merger with First Chicago NBD, created the Midwest’s largest bank. Challenges led to my appointment in 2000 to steer Bank One towards renewed growth and profitability.
Amid a wave of U.S. banking consolidation, the 2004 merger formed JPMorgan Chase — the world’s fourth-largest bank by market cap at the time. Patient investments in technology, risk management, and landmark acquisitions such as Bear Stearns and Washington Mutual propelled our rise.
Today, JPMorgan Chase stands as the top bank by market capitalization, offering world-class services powered by the cohesion of our people, technology, global footprint, and steadfast balance sheet.
Key Themes in This Letter
- 2023 Performance & Guiding Principles: Celebrating milestones and our enduring philosophy.
- Facing Today’s Challenges: AI’s transformative role, cloud migration, acquisitions, and geopolitical complexities.
- Competing in Evolving Markets: Navigating public market contraction and governance pressures.
- Management Wisdom: Embracing deliberate decisions and empathetic leadership.
- Strategic Imperatives: Upholding American and Western leadership in a shifting world.
Embracing the AI Revolution
Artificial intelligence, first spotlighted in 2017, has become central to our operations. With over 2,000 AI and machine learning specialists, we harness 400+ active AI applications spanning marketing, fraud detection, and risk management, generating tangible business value.
Exploration into generative AI promises to reshape workflows in software development, customer service, and productivity enhancements. We invest thoughtfully, mindful of AI’s workforce impact, committing to retrain affected employees as we evolve.
Harnessing vast, high-quality data sets, we are migrating analytics to the public cloud to unlock unprecedented computational power — a game-changer in risk management and customer service.
A new Chief Data & Analytics Officer role underscores AI’s strategic importance, embedding data-driven decision-making deep within our leadership structure.
Robust ethical frameworks and collaboration with regulators ensure AI’s risks — including bias and security threats — are vigilantly managed. We leverage AI to counter malicious actors targeting systems with sophisticated attacks.
Cloud Transformation Journey
Transitioning to cloud infrastructure — public and private — is vital, bringing faster service delivery, cost savings, and scalable computing. Our $2 billion investment in modern data centers enhances efficiency by roughly 30%, with plans to migrate over 70% of applications and 75% of data by year-end 2024.
Strategic decisions about workload allocation prevent vendor lock-in and balance security with innovation. Maintaining in-house expertise ensures long-term resilience.
First Republic Bank Acquisition: Stabilizing the Financial Landscape
Our acquisition of First Republic, in coordination with regulators, averted further systemic disruption. While financial gains are promising — a $3 billion accounting uplift and expected earnings boosts now revised upward — integration complexity is immense, involving the consolidation of 165+ systems and policies.
Crucially, we avoided inheriting First Republic’s risky interest rate positions, swiftly hedging exposures. We prioritized humane transition management, redeploying thousands of affected employees and incorporating First Republic’s expertise in serving high-net-worth clients into our growing portfolio.
Steering Through an Uncertain and Fraught Global Environment
We navigate a geopolitical landscape potentially as perilous as any since World War II, compounded by historic debt levels, fiscal stimulus, and unprecedented quantitative tightening. JPMorgan Chase plans for a broad spectrum of economic scenarios rather than relying on a singular forecast.
While some economic indicators remain favorable, persistent inflation drivers — fiscal spending, militarization, trade realignments, green capital demands, and energy infrastructure underinvestment — cloud the outlook. Historical parallels to 1970s inflation underscore the risks.
Capital markets price a 70–80% likelihood of a soft landing; our assessment is more cautious. Interest rates may reach 2–8% or beyond, with outcomes ranging from healthy growth to stagflation. Being ready for these eventualities equips us to support clients through any storm.
Regional Banking Crisis: Contained but With Caveats
The 2023 regional banking turmoil, triggered by three banks with concentrated vulnerabilities, is largely resolved thanks to regulatory and private sector cooperation. However, rising long-term rates and a potential recession remain risks for the broader economy, affecting leveraged entities and commercial real estate valuations.
After years of historically low rates, many investors and companies may not be fully prepared for sustained higher interest environments.
Global Engagement and Navigating Complex Markets
Operating in over 100 countries with boots on the ground in 60+, JPMorgan Chase conducts extensive economic research, banking services, and multinational client support worldwide. We adhere strictly to U.S. foreign policy and local laws, recognizing that engagement promotes progress better than isolation.
- U.S. Policy Alignment: We comply fully with U.S. laws, including sanctions and anti-corruption rules.
- Engagement Fosters Improvement: Diplomacy and commerce drive change more effectively than coercion.
- Strategic Preparation: New roles focus on Asia-Pacific competitiveness and emerging risks like cyberwarfare and pandemics.
Advancing Equity and Community Impact
JPMorgan Chase’s daily interactions with clients and communities drive trust and sustainable growth. Our social commitments underpin business success and shareholder value, creating a virtuous cycle.
Flagship Initiatives
- Business Resource Groups: Fostering inclusivity through 10 BRGs uniting 160,000+ employees.
- Women on the Move: Empowering female leaders across clients and employees worldwide.
- Advancing Black Pathways: Building economic foundations and talent pipelines.
- Military & Veterans: Supporting over 18,000 veteran hires and 3,100 military spouses.
- Disability Inclusion: Championing economic opportunities and legislative advocacy.
- Virtual Call Centers: Creating jobs and outperforming traditional centers via Detroit and Baltimore programs.
- Entrepreneurs of Color Fund: Deploying $176 million and nearly 3,000 loans nationwide.
- Senior Business Consultants: Coaching thousands of small business owners in underserved areas.
- AdvancingCities: Scaling Detroit’s revitalization model to global communities.
- Service Corps: Delivering over 100,000 volunteer hours supporting 300+ nonprofits worldwide.
- Community Centers & Managers: Expanding financial education and local engagement with 149 managers.
- Work Skills Development: Training over 2 million individuals globally in high-demand fields.
- Rural Expansion: Serving 17 million rural consumers with over $275 billion in deposits and loans, targeting expanded branch access.
Racial Equity Commitment
Our $30 billion pledge from 2020 has become business as usual, emphasizing meaningful, measurable outcomes over mere spending. Highlights include:
- Affordable Housing: $21 billion in loans preserving 190,000+ affordable units and $5 billion for new construction.
- Homebuyer Grants: $7,500 maximum grants in select markets aiding 14,000+ Black, Hispanic, and Latino households.
- Small Business Credit: Over $43 million extended to underserved entrepreneurs via specialized credit programs.
- Supplier Diversity: $2.3 billion spent with diverse suppliers, including $450 million with minority-owned firms.
- Financial Institution Investments: $110 million equity and $260 million in financing to minority banks boosting community services.
Continued Commitment to Diversity, Equity, and Inclusion
We rigorously review compliance with evolving laws and remain confident that our initiatives foster innovation, sound decision-making, and enhanced financial and societal outcomes.
Equity, to us, means ensuring equal treatment, opportunity, and access — not equalized outcomes. It’s about bridging gaps while honoring meritocracy and welcoming all employees.
Speaking on Social Issues with Clarity and Conviction
As a staunch supporter of regulated free enterprise and democracy, we approach cultural and legislative matters thoughtfully. While we express our values candidly, we refrain from speaking on behalf of others. We uphold freedom of expression but reject intimidation and discrimination, enforcing codes of conduct reflective of our ethical standards.
A Five-Point Plan to Combat Climate Challenges
In May 2023, industry, government, and financial leaders convened to tackle the climate crisis, recognizing its vast complexity. Transitioning energy systems and supply chains demands:
- Strong Government Policy: Clear mandates, incentives, permitting reform, and infrastructure upgrades, especially to modernize inadequate grids.
- Public/Private Partnerships: Scaling both proven and emerging clean technologies through catalytic capital and risk-sharing.
- Public Engagement: Building social license via education and outreach to communities benefiting from renewable projects.
- Highlighting Successes: Celebrating technological milestones to combat misinformation and foster informed dialogue.
- Workforce Training: Scaling job programs, including initiatives to meet the growing demand for electricians tied to electrification.
While we respect industry collaboratives, we’ve charted an independent course grounded in internal expertise and rigorous risk standards.
Addressing climate challenges requires effective government action, technological breakthroughs, and distinction between aspirational goals and binding commitments.
Fueling Florida’s Economic Engine
For over 130 years, JPMorgan Chase has been integral to Florida’s communities, generating billions in economic activity, creating jobs, and investing in neighborhoods statewide.
- Support for 150+ government, education, healthcare, and nonprofit clients with over $20 billion in credit and capital.
- Serving 12,500+ large and midsized businesses with $318 billion in credit and capital over five years.
- Backing 50+ financial institutions critical to Florida’s economic fabric.
- Extending $1.2 billion in small business loans, aiding over 654,000 small business customers.
- Operating 410 branches and 1,445 ATMs statewide, supporting 6.1 million consumers.
- Investing nearly $65 million philanthropically in workforce development, justice, and tech equity initiatives.
- Employing 14,000+ Floridians, including nearly 1,900 veterans and 660 individuals with criminal backgrounds.
- Average employee salary exceeds $87,000, nearly double the state per capita income.
Reevaluating Regulatory and Supervisory Frameworks
Though Dodd-Frank brought significant improvements since 2010, the current regulatory landscape is bloated with duplications, inconsistencies, and unintended consequences. These burdens disproportionately affect smaller and regional banks, the shadow banking system, and ultimately consumers.
The Basel III endgame proposal threatens to handicap American banks by imposing capital requirements far exceeding those in the EU, potentially stifling market-making and lending activities vital to the real economy.
- Complex, overlapping regulations: Massive, duplicative rulebooks waste valuable resources.
- Failure to address root causes: Liquidity rules and interest rate exposures remain problematic post-SVB and First Republic failures.
- Risk of unintended harm: Rules may shrink bank services, raise costs, and concentrate risk.
Stronger cooperation between banks and regulators could redirect efforts towards critical risks like China, cybersecurity, and payment systems, while simplifying and improving compliance.
Preserving Market-Making as an Economic Pillar
Market making is ubiquitous and essential — from commodities to capital markets — providing liquidity, transparency, and enabling cheaper capital for households, businesses, and governments. The U.S. boasts the largest, most liquid public debt and equity markets globally, totaling $137 trillion, surpassing annual GDP.
Contrary to misconceptions equating market making with speculative hedge fund activity, our firm dedicates significant capital, technology, and research to support this function, which historically generates consistent profits even in tumultuous periods.
Key data points:
- Market-making business has never posted a quarterly loss in the past decade.
- During COVID-19’s height, daily market-making revenue remained positive, with $2.5 billion earned over March 2020.
- Worst quarter after the Lehman collapse saw manageable losses offset by strong full-year earnings.
New regulations increasing capital requirements risk reducing liquidity, raising costs for consumer goods, mortgages, retirement savings, and infrastructure projects, and pushing activity to less regulated sectors.
Public Markets Shrinking, Private Markets Expanding
The U.S. public company count has plummeted from 7,300 in 1996 to about 4,300 today, while private equity-backed firms have surged from 1,900 to 11,200. Contributing factors include rising regulatory burdens, litigation costs, and evolving governance pressures, all driving firms away from public listings.
Proxy advisors like ISS and Glass Lewis wield outsized influence, sometimes overshadowing portfolio managers’ judgment, prompting JPMorgan Asset Management to enhance internal proxy voting processes to strengthen fiduciary independence.
Private Credit: Opportunities and Cautions
Private credit offers nimble financing, but lacks transparency and secondary market liquidity, potentially triggering stress in downturns. Banks maintain flexible capital to support borrowers through cycles, a dynamic distinct from fiduciary-constrained asset managers.
Leadership Lessons: The OODA Loop and Heart
Inspired by military strategy, the OODA loop — Observe, Orient, Decide, Act — guides business clarity and agility. Rigorous assessment, relentless curiosity, and questioning entrenched assumptions underpin success.
Decision-making must balance speed and deliberation, embracing both crowdsourced intelligence and individual courage. Effective committees are vital but must avoid herd mentality.
Critically, leadership demands trust earned through transparency, empathy, humility, and consistent communication. Actions speak louder than words; care and fairness galvanize teams and communities.
A Critical Juncture for America and the Free World
America’s foundational values of liberty, equality, and democracy remain a global lodestar. Recent geopolitical upheavals, from Ukraine’s invasion to Middle Eastern conflicts, challenge assumptions about security and order.
U.S. leadership is irreplaceable in uniting Western democracies against autocratic forces. Military might and a multifaceted “symphony of power” — including diplomacy, intelligence, and economic strategy — are essential.
America must also address domestic fractures — immigration, economic inequality, and social trust — with thoughtful, growth-oriented policies emphasizing education, consistent tax and regulatory frameworks, infrastructure, and fiscal responsibility.
Strengthening Global Economic Security
Trade, supply chains, export controls, and development finance require cohesive strategies that prioritize democratic alliances without antagonizing nonaligned nations. Industrial policy should be narrowly focused and free from extraneous social mandates.
Engagement with China must be firm but pragmatic, balancing competition with dialogue, acknowledging China’s economic heft and vulnerabilities.
Renewing International Order
The post-WWII rules-based framework faces erosion and complexity. A refreshed Bretton Woods-like summit may be needed to realign global institutions and address neglected regions.
Domestic Renewal: Mending the American Dream
Growing wage disparities, limited savings in low-income households, educational inequities, and social challenges threaten national cohesion. Programs like expanding the Earned Income Tax Credit and aligning education with workforce needs offer promising paths forward.
- Approximately 40 million Americans earn less than $15 per hour.
- Nearly 40% lack $400 in emergency savings; 25+ million uninsured.
- High school graduation and college attendance disparities correlate with socio-economic status.
Respect for all jobs and expanded income supports can boost employment, reduce crime, and increase GDP.
Closing Reflections
Two decades after the landmark merger, I am humbled by the dedication of JPMorgan Chase’s leadership and employees. Our collective achievements demonstrate what principled, resilient organizations can accomplish in a fast-evolving world.
We remain optimistic for a future marked by peace, prosperity, and the enduring strength of freedoms that define America.
Jamie Dimon
Chairman and Chief Executive Officer
April 8, 2024