The MoatWide moat

JPMorgan Chase (JPM) — moat facet

Most bank moats are not moats: loans are commodities and deposits pay market rates. Four things here are real, and the most durable of them was imposed by a regulator rather than built by a management team.

The uncomfortable thing about bank moats is that most of them are not moats. Loans are commodities, deposits pay market rates, and a mortgage from one bank is identical to a mortgage from another. Plenty of large banks earn less than their cost of equity for years at a time.

Return on tangible common equityWACC ~10%13%201512%201719%201914%202023%202121%202320%2025Cleared a ~10% cost of equity in every one of eleven years, including the pandemic.
Most large banks do not earn their cost of capital. This one earns twice it.

JPMorgan does not, and the reasons are specific rather than general.

The first is the funding. $2.56 trillion of deposits, on which the firm paid an average of 1.80% in 20251, is the cheapest large pool of money in finance. About $572 billion of the US balances pay nothing at all2. Nobody can assemble that from a standing start, and the loans-to-deposits ratio of 58%3 means the bank is not even using most of it — it lends barely more than half of what it holds.

The second is that three businesses fund and stabilise each other. Consumer deposits fund wholesale lending; corporate relationships feed the investment bank; asset management earns fees that keep arriving when markets are bad for everything else. In 2020, with the economy shut, JPMorgan earned $29.1 billion4.

The third is the size of the fixed-cost base. Roughly $105 billion of adjusted expense is planned for 20265, of which nearly $20 billion is technology. That is not a cost a challenger can match; it is a cost only the largest revenue base in the industry can carry.

The fourth is regulation, which is both a wall and a tax. You cannot start one of these. The charter, the stress test, the surcharge and the capital requirement keep the field to a handful of firms — and impose costs that make it hard for those firms to earn much.

So: a wide moat, and an unusual one, because most of what protects it was imposed rather than built. The number that tests it is return on tangible common equity against a ~10% cost of equity. It was 20% in 20256, and the year it settles into the low teens is the year this is an ordinary bank.

Moat trajectory: Widening

The bank is taking share in the businesses that matter while its funding advantage holds. Investment-banking wallet share went from 8.4% for 2025 to 9.3% year to date in 2026, assets under management rose 18% to $5.1 trillion, and deposits grew 7% year on year — all while return on tangible common equity stayed at 20% for the full year. The offset is honest: the rate tailwind that produced much of the revenue growth is fading by management's own guidance.

The number that tests this moat
Reported
ROTCE vs a ~10% cost of equity
20% in 2025 — cleared the hurdle 11 years running

Return on tangible common equity was 20% in 2025, 22% in 2024 and 21% in 2023, against a cost of equity nearer 10%. It has not fallen below the hurdle in a decade, including 2020. For a bank this is the whole moat test — most large banks do not clear it — and the year it settles into the low teens is the year this is an ordinary bank.

ROTCE is a non-GAAP measure JPMorgan discloses and reconciles in every filing; the ~10% cost of equity is an assumption.
Source: JPMorgan Chase Form 10-K, FY2025 ↗
Aspects of the moat
DIG DEEPER 01
The Deposit Franchise
Two and a half trillion dollars at an average cost of 1.80 percent, of which 572 billion pays nothing at all -- the cheapest large pool of money in…
DIG DEEPER 02
Three Businesses That Fund Each Other
Consumer deposits fund wholesale lending, corporate relationships feed the investment bank, and asset management earns fees when neither is working…
DIG DEEPER 03
The Scale of the Spend
About 105 billion dollars of expense at a 52 percent overhead ratio -- enormous in absolute terms, ordinary as a proportion, and unmatchable by anyone…
DIG DEEPER 04
Regulation as a Wall and a Tax
You cannot start one of these -- and the price of that protection is a capital requirement, a stress test and a surcharge all written by somebody…
References
  1. ReportedThe average rate paid on total deposits was 1.80% in 2025, against 2.08% in 2024 and 1.70% in 2023.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  2. ReportedUS non-interest-bearing average balances were $572,014M in 2025, from $611,734M in 2024 and $635,791M in 2023.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  3. ReportedLoans of $1,493,429M against deposits of $2,559,320M — a loans-to-deposits ratio of 58%, from 56% and 55%.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
  4. ReportedJPMorgan earned net income of $29,131M in 2020.
    JPMorgan Chase annual results, from SEC EDGAR XBRL company facts (CIK 19617) — total net revenue and net income by year: 2015 $93,543M / $24,442M, 2016 $96,569M / $24,733M, 2017 $100,705M / $24,441M, 2018 $108,783M / $32,474M, 2019 $115,720M / $36,431M, 2020 $119,951M / $29,131M, 2021 $121,649M / $48,334M, 2022 $128,695M / $37,676M, 2023 $158,104M / $49,552M, 2024 $177,556M / $58,471M, 2025 $182,447M / $57,048M. Diluted weighted-average shares fell from 3,774 million in 2015 to 2,782 million in 2025. Trailing twelve months to 30 June 2026: revenue $199,408M and net income $65,067M. — FY2015-FY2025 and TTM · publ. 2026-08 · source ↗
  5. ReportedManagement expects 2026 adjusted expense of approximately $105 billion and net interest income excluding Markets of approximately $95 billion.
    JPMorgan Chase & Co., Form 10-K for the fiscal year ended 31 December 2025 (SEC, CIK 19617) — total net revenue $182,447M against $177,556M in 2024 and $158,104M in 2023; total noninterest expense $95,640M; pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M and diluted EPS $20.02; return on equity 17%, return on tangible common equity 20% (22% in 2024, 21% in 2023), return on assets 1.29%, overhead ratio 52% (52% in 2024, 55% in 2023), loans-to-deposits ratio 58% (56%, 55%), liquidity coverage ratio 111%. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M (63% of total liabilities), long-term debt $435,206M, common stockholders' equity $342,393M, tangible common equity $290,018M, book value per share $126.99 and tangible book value per share $107.56; dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: Consumer & Community Banking $76,029M, $71,507M and $70,148M; Commercial & Investment Bank $78,454M, $70,114M and $64,353M; Asset & Wealth Management $24,073M, $21,578M and $19,827M across 2025, 2024 and 2023. Banking & Payments revenue by client coverage: Global Corporate Banking and Global Investment Banking $25,285M and Commercial Banking $11,851M in 2025. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M), US interest-bearing demand $321,145M at 3.26%, US savings $875,519M at 1.41%; total deposits average rate 1.80% (2024 2.08%, 2023 1.70%). Firmwide estimated uninsured deposits $1,558.6bn at 31 December 2025 and $1,414.0bn a year earlier, 'primarily reflecting wholesale operating deposits'. Basel III common equity Tier 1 capital $288bn, Standardized ratio 14.6%; the Standardized CET1 requirement including regulatory buffers was 11.5%, with a stress capital buffer of 2.5% effective through 30 September 2027 and the annual capital plan due 6 April 2026. Capital is allocated to the lines of business using standardized risk-weighted assets and the GSIB surcharge, reassessed at least annually; the enhanced supplementary leverage ratio rules were revised to set the buffer at 50% of the firm's US Method 1 GSIB surcharge. The July 2023 Basel III endgame proposal was never finalised, and in September 2025 the Federal Reserve's Vice Chair for Supervision indicated regulators may issue an updated proposal in early 2026, the timing and content of which remain uncertain. 2025 included a $588M First Republic-related gain and an estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023; 2024 revenue included a $7.9bn net gain on Visa shares. Apple Card transaction: on 7 January 2026 the firm announced Chase will become the new issuer of Apple Card, having entered a forward purchase commitment on 30 December 2025, with expected closing in approximately 24 months; the 2025 provision includes $2.2bn for lending-related commitments and the Standardized CET1 ratio decreased approximately 25 basis points. 2026 outlook: net interest income excluding Markets of approximately $95bn and adjusted expense of approximately $105bn, with a Card Services net charge-off rate of approximately 3.4%. Global workforce of 318,512 employees; JPMorgan Chase Bank, N.A. operates US branches in 48 states and Washington, D.C. Competition: 'Competitors include other banks, brokerage firms, investment banking companies, merchant banks, hedge funds, commodity trading companies, private equity firms, insurance companies, mutual fund companies, investment managers, credit card companies, mortgage banking companies, trust companies, securities processing companies, automobile financing companies, leasing companies, e-commerce and other internet-based companies, digital asset and other financial technology companies'; 'New competitors in the financial services industry continue to emerge, including firms that offer products and services solely through the internet and non-financial companies that offer products and services that disintermediate traditional banking products and services'. Risk factors warn that advocacy by non-banking competitors for exemptions from regulatory requirements could significantly disadvantage traditional financial institutions; that failing to keep pace with rapidly changing technological advances including generative AI risks losing clients and market share, with competition intensifying as new technologies become more capable and scalable; that adverse conditions could prompt outflows or cause clients to invest in products that generate lower revenue; and that the interconnectivity across credit markets increases the risk that the significant expansion of private credit could worsen losses among non-bank lenders and their borrowers, particularly if stress or defaults spread to broader funding and credit markets. — FY2025 · publ. 2026-02-13 · source ↗
  6. Reported2025 net income $57,048M, diluted EPS $20.02, return on equity 17% and return on tangible common equity 20%.
    JPMorgan Chase & Co., Form 10-K FY2025 — consolidated financial statements and management's discussion (SEC, CIK 19617). Total net revenue $182,447M (2024 $177,556M, 2023 $158,104M); total noninterest expense $95,640M (2023 $87,172M); pre-provision profit $86,807M; provision for credit losses $14,212M; net income $57,048M; diluted EPS $20.02; ROE 17%, ROTCE 20% (2024 22%, 2023 21%); overhead ratio 52% (2024 52%, 2023 55%); loans-to-deposits 58% (56%, 55%); deposits 63% of total liabilities. Total assets $4,424,900M, loans $1,493,429M, deposits $2,559,320M, tangible common equity $290,018M, book value per share $126.99, tangible book value per share $107.56, dividends declared per share $5.80 (2024 $4.80, 2023 $4.10). Segment total net revenue: CCB $76,029M / $71,507M / $70,148M; CIB $78,454M / $70,114M / $64,353M; AWM $24,073M / $21,578M / $19,827M. Banking & Payments by client coverage: Global Corporate Banking and Global Investment Banking $25,285M, Commercial Banking $11,851M. Deposit average balances and rates: US non-interest-bearing $572,014M (2024 $611,734M, 2023 $635,791M); US interest-bearing demand $321,145M at 3.26%; US savings $875,519M at 1.41%; total deposits 1.80% (2024 2.08%, 2023 1.70%). An estimated bargain purchase gain of $2.8bn was recorded for the year ended 31 December 2023 on the First Republic acquisition, with a further $588M First Republic-related gain in the first quarter of 2025; 2024 revenue included a $7.9bn net gain on Visa shares. — FY2025 · publ. 2026-02-13 · source ↗
Sources
Generated September 23, 2026