The Scale of the SpendWide moat

JPMorgan Chase (JPM) — moat facet

About 105 billion dollars of expense at a 52 percent overhead ratio -- enormous in absolute terms, ordinary as a proportion, and unmatchable by anyone with a smaller revenue base.

The least glamorous moat in banking is the ability to spend more than anyone else and still make money.

The cost base, 2025 ($bn)$182.4bnTotal net revenue$95.6bnNoninterest expense$86.8bnPre-provision profitA 52% overhead ratio, carrying a full investment bank and a network in 48 states.
Enormous in absolute terms, ordinary as a proportion - the whole fixed-cost argument.

JPMorgan has guided 2026 adjusted expense to approximately $105 billion1. Technology alone is expected to be about $19.8 billion, up roughly 10% on the year2. Set against that, the overhead ratio — expense as a share of revenue — was 52% in 20253, which is a competitive number for a bank carrying a full investment bank and a branch network.

That combination is the point. The spending is enormous in absolute terms and ordinary as a proportion, because the revenue base underneath it is the largest in the industry. A regional bank trying to match the same fraud systems, the same trading infrastructure, the same mobile application and the same compliance apparatus would be spending a far larger share of a far smaller number.

It also compounds in an unusual direction. Regulatory and technology costs are largely fixed per firm rather than per dollar of assets, so every year that requirements get more elaborate, the gap between what the largest bank can absorb and what a mid-sized one can widens.

The catch is that a fixed-cost advantage is only an advantage while revenue grows faster than the base. Expense rose alongside revenue through the rate cycle; the 2026 guidance holds the cost line rising into a year when management expects the rate tailwind to fade.

Watch the overhead ratio, not the expense number. Fifty-two percent is the moat; sixty would be a different company.

Moat trajectory: Holding steady

The overhead ratio has held at 52% for two years, which is the whole argument. Expense is guided toward $105bn for 2026 against net interest income excluding Markets of about $95bn — the first year in this cycle where the ratio has to be defended rather than delivered.

The number that tests this moat
Moat Explorer calc
Overhead ratio
52% — expense $95.6bn on revenue $182.4bn

Held at 52% in 2025 and 2024, from 55% in 2023, while carrying a full investment bank, a branch network and a systemically-important compliance apparatus. The absolute spending is the largest in the industry and the proportion is ordinary, which is the entire fixed-cost argument. Fifty-eight percent would end it.

How it's calculated: Total noninterest expense divided by total net revenue, both from the consolidated income statement.
Source: JPMorgan Chase Form 10-K, FY2025 ↗
Aspects of the moat
DIG DEEPER 01
Fifty-Two Percent
The efficiency ratio is the moat stated as a fraction, and it improved for reasons management did not choose.
DIG DEEPER 02
Nearly Twenty Billion of Technology
A technology budget larger than most banks' entire revenue, and roughly a fifth of it maintains systems nobody will ever see.
DIG DEEPER 03
Three Hundred Thousand People, and What AI Does to Them
Banking has never had operating leverage because every customer required a person; this is the first credible mechanism for that to stop being true.
DIG DEEPER 04
Branches in Forty-Eight States
A physical network nobody would build today, and the reason 1.7 million households still choose where to keep their salary in person.
⚠ Threats to the moat
⚠ THREAT 01
A Cost Base That Only Works While Revenue Grows
105 billion dollars of expense is an advantage at 200 billion of revenue and a problem at 160.
⚠ THREAT 02
Spending More Is Not the Same as Spending Well
Outspending everyone only helps if the money converts, and in bank technology it frequently has not.
References
  1. 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 ↗
  2. Third-party estimateJPMorgan expects approximately $19.8 billion of technology spend in 2026, up about 10%, with cost pressures including AI-related chip and memory shortages.
    Reported analysis of JPMorgan's 2026 technology budget — the firm expects approximately $19.8 billion of technology spend in 2026, up about 10% year on year, driven by business growth and demand for new products and capabilities, with cost pressures including inflation and higher hardware costs amid AI-related chip and memory shortages, plus higher infrastructure (including public cloud) and software costs tied to volume and feature demand. — 2026 outlook · publ. 2026 · source ↗
  3. ReportedThe overhead ratio was 52% in 2025 and 2024, against 55% 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 ↗
Sources
Generated September 23, 2026