Regulatory capital

6 Months Ended

Jun. 30, 2015

Banking and Thrift [Abstract]

Regulatory capital

Regulatory capital

The Federal Reserve establishes capital requirements, including well-capitalized standards, for the consolidated financial holding company. The Office of the Comptroller of the Currency (“OCC”) establishes similar capital requirements and standards for the Firm’s national banks, including JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A.

Basel III, for large and internationally active U.S. bank holding companies and banks, including the Firm and its insured depository institution (“IDI”) subsidiaries, revised, among other things, the definition of capital and introduced a new common equity Tier 1 capital (“CET1 capital”) requirement; presents two comprehensive methodologies for calculating risk-weighted assets (“RWA”), a general (Standardized) approach, which replaced Basel I RWA effective January 1, 2015, (“Basel III Standardized”) and an advanced approach, which replaced Basel II RWA (“Basel III Advanced”); and sets out minimum capital ratios and overall capital adequacy standards. Certain of the requirements of Basel III are subject to phase-in periods that began on January 1, 2014 and continue through the end of 2018 (“Basel III Transitional”).

There are three categories of risk-based capital under the Basel III Transitional rules: common equity Tier 1 capital (“CET1 capital”), as well as Tier 1 capital and Tier 2 capital. CET1 capital predominantly includes common stockholders’ equity (including capital for AOCI related to debt and equity securities classified as AFS as well as for defined benefit pension and OPEB plans), less certain deductions for goodwill, MSRs and deferred tax assets that arise from net operating loss (“NOL”) and tax credit carryforwards. Tier 1 capital is predominantly comprised of CET1 capital as well as perpetual preferred stock. Tier 2 capital includes long-term debt qualifying as Tier 2 and qualifying allowance for credit losses. Total capital is Tier 1 capital plus Tier 2 capital.

The following tables present the regulatory capital, assets and risk-based capital ratios for JPMorgan Chase and its significant national bank subsidiaries under both Basel III Standardized Transitional and Basel III Advanced Transitional.

	JPMorgan Chase & Co.(e)
	Basel III Standardized Transitional							Basel III Advanced Transitional
(in millions, except ratios)	Jun 30, 2015				Dec 31, 2014			Jun 30, 2015			Dec 31, 2014
Regulatory capital
CET1 capital	$	169,769			$	164,426		$	169,769		$	164,426
Tier 1 capital(a)	194,725				186,294			194,725			186,294
Total capital	228,390				221,225			218,811			210,684
Assets
Risk-weighted	1,499,638			(f)	1,472,602			1,520,140			1,608,240
Adjusted    average(b)	2,448,357				2,465,414			2,448,357			2,465,414
Capital ratios(c)
CET1	11.3		%		11.2		%	11.2		%	10.2		%
Tier 1(a)	13.0				12.7			12.8			11.6
Total	15.2				15.0			14.4			13.1
Tier 1 leverage(d)	8.0				7.6			8.0			7.6

	JPMorgan Chase Bank, N.A.(e)
	Basel III Standardized Transitional							Basel III Advanced Transitional
(in millions, except ratios)	Jun 30, 2015				Dec 31, 2014			Jun 30, 2015			Dec 31, 2014
Regulatory capital
CET1 capital	$	161,814			$	156,567		$	161,814		$	156,567
Tier 1 capital(a)	161,966				156,891			161,966			156,891
Total capital	177,249				173,328			170,346			166,331
Assets
Risk-weighted	1,274,043			(f)	1,230,358			1,275,783			1,330,175
Adjusted average(b)	1,982,100				1,968,131			1,982,100			1,968,131
Capital ratios(c)
CET1	12.7		%		12.7		%	12.7		%	11.8		%
Tier 1(a)	12.7				12.8			12.7			11.8
Total	13.9				14.1			13.4			12.5
Tier 1 leverage(d)	8.2				8.0			8.2			8.0

	Chase Bank USA, N.A.(e)
	Basel III Standardized Transitional							Basel III Advanced Transitional
(in millions,  except ratios)	Jun 30, 2015				Dec 31, 2014			Jun 30, 2015			Dec 31, 2014
Regulatory capital
CET1 capital	$	15,002			$	14,556		$	15,002		$	14,556
Tier 1 capital(a)	15,002				14,556			15,002			14,556
Total capital	20,952				20,517			19,652			19,206
Assets
Risk-weighted	101,754			(f)	103,468			156,286			157,565
Adjusted average(b)	129,421				128,111			129,421			128,111
Capital ratios(c)
CET1	14.7		%		14.1		%	9.6		%	9.2		%
Tier 1(a)	14.7				14.1			9.6			9.2
Total	20.6				19.8			12.6			12.2
Tier 1 leverage(d)	11.6				11.4			11.6			11.4

(a) At June 30, 2015, trust preferred securities included in Basel III

Tier 1 capital were $960 million and $150 million for JPMorgan Chase and JPMorgan Chase Bank, N.A., respectively. At June 30, 2015, Chase Bank USA, N.A. had no trust preferred securities.

(b) Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 Capital predominantly comprising disallowed goodwill and other intangible assets.

(c) For each risk-based capital ratio, the capital adequacy of the Firm and its national bank subsidiaries are evaluated against the Basel III approach, Standardized or Advanced, resulting in the lower ratio.

(d) As the Tier 1 leverage ratio is not a risk-based measure of capital, the ratios presented in the table reflect the same calculation.

(e) Asset and capital amounts for JPMorgan Chase’s national banking subsidiaries reflect intercompany transactions; whereas the respective amounts for JPMorgan Chase reflect the elimination of intercompany transactions.

(f) Effective January 1, 2015, the Basel III definition of the Standardized RWA became effective. Prior measures of Basel III Standardized RWA were calculated under Basel I rules.

Note: Rating agencies allow measures of capital to be adjusted upward for deferred tax liabilities, which have resulted from both nontaxable business combinations and from tax-deductible goodwill. The Firm had deferred tax liabilities resulting from nontaxable business combinations totaling $117 million and $130 million at June 30, 2015, and December 31, 2014, respectively; and deferred tax liabilities resulting from tax-deductible goodwill of $2.8 billion and $2.7 billion at June 30, 2015, and December 31, 2014, respectively.

Under the risk-based capital guidelines of the Federal Reserve, JPMorgan Chase is required to maintain minimum ratios of CET1 (beginning January 1, 2015), Tier 1 and total capital to risk-weighted assets, as well as a minimum leverage ratio (which is defined as Tier 1 capital divided by adjusted quarterly average assets). Failure to meet these minimum requirements could cause the Federal Reserve to take action. National bank subsidiaries also are subject to these capital requirements by their respective primary regulators. The following table presents the minimum ratios to which the Firm and its national bank subsidiaries are subject as of June 30, 2015.

	Minimum capital ratios(a)		Well-capitalized ratios(a)
Capital ratios
CET1	4.5	%	6.5	%
Tier 1	6.0		8.0
Total	8.0		10.0
Tier 1 leverage	4.0		5.0		(b)

(a) As defined by the regulations issued by the Federal Reserve, OCC and FDIC.

(b) Represents requirements for bank subsidiaries pursuant to regulations issued under the FDIC Improvement Act. There is no Tier 1 leverage component in the definition of a well-capitalized bank holding company.

As of June 30, 2015, and December 31, 2014, JPMorgan Chase and all of its banking subsidiaries were well-capitalized and met all capital requirements to which each was subject.