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JPMorgan Chase shares were on track for their biggest fall in eight months on Tuesday after the biggest US bank by assets warned that its expenses would rise by more than $9bn next year.
Marianne Lake, who runs JPMorgan’s retail business, said the bank was expecting expenses for 2026 of $105bn, up almost 10 per cent from 2025. Analysts were forecasting spending next year of $101bn.
The consumer and community division was a “big part of that expense growth”, Lake said.
Lake noted that the jump in costs was driven by factors including investments in artificial intelligence, higher performance-based incentive compensation for financial advisers, marketing, and spending on credit card business and bank branches.
She added that inflation was also pushing up expenses.
“We feel really great about the expenses, not just how we’re investing the money, but also in the context of the performance of the business,” said Lake, who is one of the top contenders to one day take over from Jamie Dimon running JPMorgan. “And thematically, those themes are consistent across the company.”
The warning on expenses hit JPMorgan shares, which fell more than 4 per cent following Lake’s comments, the biggest drop since April’s market ructions. The stock hit a record high last month.
JPMorgan’s spending on areas such as branches and technology often towers over the wider banking industry because of its vast scale.
Lake also updated investors that the bank’s fees from investment banking were on course to be up “low single digits” year over year in the fourth quarter while trading revenues were trending to be up “low teens” from a year ago.