JPM's 2025 NII Outlook: CEO Jamie Dimon Spars with Analysts

JPMorgan Chase (JPM.US) Chairman and CEO Jamie Dimon engaged in a heated debate with analysts regarding the bank's net interest income (NII) for the year 2025 during a conference call on Friday following the bank's third-quarter financial report. The CEO expressed that, upon in-depth examination, the NII performance for 2025 would depend on many factors that the bank could not control, and he sharply stated, "I can point out that NII is a number under all conditions being equal, but conditions are never the same, right?"

When asked by UBS analyst Erika Najarian about the company's expectations for net interest income in 2025, she received a sharp response from the bank. The analyst said, "I expect a 6% sequential decline in NII for the fourth quarter. I believe there will be a year-over-year decline in 2025, and the consensus expectation will be 4% lower than your new level. Therefore, it sounds like there is still room for the market to expect a decline in 2025, and the year-over-year decline could be worse than the sequential rate in the fourth quarter, based on the yield curve." She phrased her question in response to the bank's assumptions about the yield curve when setting the 2025 NII guidance.

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Dimon said, "I don't want to spend all my time on these conference calls, as if they are guessing what next year's NII will look like." However, he did respond by saying, "So the expectation for next year will be less than $87 billion, probably not much, we don't know, and we don't understand the environment."

In a subsequent conference call, Morgan Stanley analyst Betsy Graseck defended her question about NII by saying, "NII accounts for more than half of your revenue, so I'm a bit concerned about it."

Summarizing the company's forward guidance on NII, in a meeting in September, JPMorgan Chase President Daniel Pinto told investors that expectations for 2025 NII were too high. In Friday's financial report, the company stated that the NII for the fourth quarter of 2024 (excluding market impact) is expected to be around $22.1 billion, compared to $23.4 billion in the third quarter of 2024.

Chief Financial Officer Jeremy Barnum stated that the current consensus of $87 billion for 2025 NII "seems a bit unrealistic, but is definitely within the ballpark." However, Dimon indicated that the figure would be below $87 billion, but the bank does not know by how much.

Despite the seemingly dimmer expectations for 2025 NII, investors were apparently quite satisfied with JPMorgan Chase's better-than-expected third-quarter results. On Friday, JPMorgan Chase's stock price rose by 4.4% during regular trading hours, marking the largest single-day increase since April 14, 2023, when it rose by 7.6%.