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Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2022
Credit Loss [Abstract]  
Allowance for Credit Losses Allowance for credit losses
The Firm's allowance for credit losses represents management's estimate of expected credit losses over the remaining expected life of the Firm's financial assets measured at amortized cost and certain off-balance sheet lending-related commitments.
Refer to Note 13 of JPMorgan Chase's 2021 Form 10-K for a detailed discussion of the allowance for credit losses and the related accounting policies.
Allowance for credit losses and related information
The table below summarizes information about the allowances for credit losses, and includes a breakdown of loans and lending-related commitments by impairment methodology. Refer to Note 10 of JPMorgan Chase’s 2021 Form 10-K and Note 9 of this Form 10-Q for further information on the allowance for credit losses on investment securities.
2022
2021
Three months ended March 31,
(in millions)		Consumer, excluding
credit card		Credit cardWholesaleTotalConsumer, excluding credit cardCredit cardWholesaleTotal
Allowance for loan losses
Beginning balance at January 1,$1,765 $10,250 $4,371 $16,386 $3,636 $17,800 $6,892 $28,328 
Gross charge-offs204 720 52 976 166 1,214 88 1,468 
Gross recoveries collected(158)(214)(22)(394)(145)(231)(35)(411)
Net charge-offs/(recoveries)46 506 30 582 21 983 53 1,057 
Provision for loan losses175 506 687 1,368 (932)(2,517)(830)(4,279)
Other
— — 20 20 (1)— 10 9 
Ending balance at March 31,$1,894 $10,250 $5,048 $17,192 $2,682 $14,300 $6,019 $23,001 
Allowance for lending-related commitments
Beginning balance at January 1,
$113 $— $2,148 $2,261 $187 $— $2,222 $2,409 
Provision for lending-related commitments
(2)— 98 96 (52)— 159 107 
Other
— — 1 1 — — — — 
Ending balance at March 31,$111 $— $2,247 $2,358 $135 $— $2,381 $2,516 
Total allowance for investment securitiesNANANA41 NANANA94 
Total allowance for credit losses$2,005 $10,250 $7,295 $19,591 $2,817 $14,300 $8,400 $25,611 
Allowance for loan losses by impairment methodology
Asset-specific(a)
$(644)$262 $485 $103 $(348)$522 $529 $703 
Portfolio-based2,538 9,988 4,563 17,089 3,030 13,778 5,490 22,298 
Total allowance for loan losses$1,894 $10,250 $5,048 $17,192 $2,682 $14,300 $6,019 $23,001 
Loans by impairment methodology
Asset-specific(a)
$13,186 $901 $2,823 $16,910 $16,008 $1,291 $3,394 $20,693 
Portfolio-based282,975 151,382 567,130 1,001,487 286,384 130,481 511,084 927,949 
Total retained loans$296,161 $152,283 $569,953 $1,018,397 $302,392 $131,772 $514,478 $948,642 
Collateral-dependent loans
Net charge-offs$(5)$— $7 $2 $20 $— $2 $22 
Loans measured at fair value of collateral less cost to sell
4,144 — 665 4,809 4,790 — 354 5,144 
Allowance for lending-related commitments by impairment methodology
Asset-specific
$— $— $139 $139 $— $— $144 $144 
Portfolio-based
111 — 2,108 2,219 135 — 2,237 2,372 
Total allowance for lending-related commitments(b)
$111 $— $2,247 $2,358 $135 $— $2,381 $2,516 
Lending-related commitments by impairment methodology
Asset-specific
$— $— $767 $767 $— $— $800 $800 
Portfolio-based(c)
31,847 — 463,570 495,417 34,468 — 440,830 475,298 
Total lending-related commitments
$31,847 $— $464,337 $496,184 $34,468 $— $441,630 $476,098 
(a)Includes collateral dependent loans, including those considered TDRs and those for which foreclosure is deemed probable, modified PCD loans and non-collateral dependent loans that have been modified or are reasonably expected to be modified in a TDR. Also includes risk-rated loans that have been placed on nonaccrual status for the wholesale portfolio segment. The asset-specific allowance for credit card loans modified, or reasonably expected to be modified, in a TDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
(b)The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
(c)At March 31, 2022 and 2021, lending-related commitments excluded $15.3 billion and $21.8 billion, respectively, for the consumer, excluding credit card portfolio segment; $757.3 billion and $674.4 billion, respectively, for the credit card portfolio segment; and $32.9 billion and $39.6 billion, respectively, for the wholesale portfolio segment, which were not subject to the allowance for lending-related commitments.
Discussion of changes in the allowance
The allowance for credit losses as of March 31, 2022 was $19.6 billion, an increase from $18.7 billion at December 31, 2021, consisting of: $776 million in wholesale, across the LOBs, and $127 million in consumer, driven by the residential real estate portfolio.
The change in the allowance largely reflects an increased weight placed on the adverse scenarios, from the more balanced weighting placed on the adverse and upside scenarios at December 31, 2021, due to the potential effects associated with higher inflation, changes in monetary policy, as well as geopolitical risks, including the war in Ukraine. The increase in the allowance also included client-specific Russia and Russia-associated downgrades in CIB and AWM.
The Firm's allowance for credit losses is estimated using a weighted average of five internally developed macroeconomic scenarios. The adverse scenarios incorporate more punitive macroeconomic factors than the central case assumptions provided in the table below, resulting in weighted average U.S. unemployment rates above 4% through the second quarter of 2023 and year over year growth in U.S. real GDP of 2.5% in the second quarter of 2023.
The Firm’s central case assumptions reflected U.S. unemployment rates and U.S. real GDP as follows:
Assumptions at March 31, 2022
2Q224Q222Q23
U.S. unemployment rate(a)
3.6 %3.3 %3.3 %
YoY growth in U.S. real GDP(b)
3.7 %2.9 %2.6 %
Assumptions at December 31, 2021
2Q224Q222Q23
U.S. unemployment rate(a)
4.2 %4.0 %3.9 %
YoY growth in U.S. real GDP(b)
3.1 %2.8 %2.1 %
(a)Reflects quarterly average of forecasted U.S. unemployment rate.
(b)As of March 31, 2022, the year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percent change in U.S. real GDP levels from the prior year.
Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.
Refer to Note 13 and Note 10 of JPMorgan Chase's 2021 Form 10-K for a description of the policies, methodologies and judgments used to determine the Firm’s allowances for credit losses on loans, lending-related commitments, and investment securities.
Refer to Critical Accounting Estimates Used by the Firm on pages 75-77 for further information on the allowance for credit losses and related management judgments.
Refer to Consumer Credit Portfolio on pages 49-53, Wholesale Credit Portfolio on pages 54-62 and Note 11 for additional information on the consumer and wholesale credit portfolios.