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Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2025
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. The allowance for credit losses generally comprises:
•the allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated),
•the allowance for lending-related commitments, which is presented on the Consolidated balance sheets in accounts payable and other liabilities, and
•the allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.
The income statement effect of all changes in the allowance for credit losses is recognized in the provision for credit losses. Determining the appropriateness of the allowance for credit losses is complex and requires significant judgment by management about the effect of matters that are inherently uncertain. At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the Controller of the Firm. Subsequent evaluations of credit exposures, considering the macroeconomic conditions, forecasts and other factors then prevailing, may result in significant changes in the allowance for credit losses in future periods.
The Firm’s policies used to determine its allowance for loan losses and its allowance for lending-related commitments are described in the following paragraphs. Refer to Note 10 for a description of the policies used to determine the allowance for credit losses on investment securities.
Methodology for allowances for loan losses and lending-related commitments
The allowance for loan losses and allowance for lending-related commitments represent expected credit losses over the remaining expected life of retained loans and lending-related commitments that are not unconditionally cancellable. The Firm does not record an allowance for future draws on unconditionally cancellable lending-related commitments (e.g., credit cards). Expected losses related to accrued interest on credit card loans are considered in the Firm’s allowance for loan losses. However, the Firm does not record an allowance on other accrued interest receivables, due to its policy to write these receivables off no later than 90 days past due by reversing interest income.
The expected life of each instrument is determined by considering its contractual term, expected prepayments, cancellation features, and certain extension and call options. The expected life of funded credit card loans is generally estimated by considering expected future payments on the credit card account, and determining how much of those amounts should be
allocated to repayments of the funded loan balance (as of the balance sheet date) versus other account activity. This allocation is made using an approach that incorporates the payment application requirements of the Credit Card Accountability Responsibility and Disclosure Act of 2009, generally paying down the highest interest rate balances first.
The estimate of expected credit losses includes expected recoveries of amounts previously charged off or expected to be charged off, even if such recoveries result in a negative allowance.
Collective and Individual Assessments
When calculating the allowance for loan losses and the allowance for lending-related commitments, the Firm assesses whether exposures share similar risk characteristics. If similar risk characteristics exist, the Firm estimates expected credit losses collectively, considering the risk associated with a particular pool and the probability that the exposures within the pool will deteriorate or default. The assessment of risk characteristics is subject to significant management judgment. Emphasizing one characteristic over another or considering additional characteristics could affect the allowance.
•Relevant risk characteristics for the consumer portfolio include product type, delinquency status, current FICO scores, geographic distribution, and, for collateralized loans, current LTV ratios.
•Relevant risk characteristics for the wholesale portfolio include risk rating, delinquency status, tenor, level and type of collateral, LOB, geography, industry, credit enhancement, product type, facility purpose, and payment terms.
The majority of the Firm’s credit exposures share risk characteristics with other similar exposures, and as a result are collectively assessed for impairment (“portfolio-based component”). The portfolio-based component covers consumer loans, performing risk-rated loans and certain lending-related commitments.
If an exposure does not share risk characteristics with other exposures, the Firm generally estimates expected credit losses on an individual basis, considering expected repayment and conditions impacting that individual exposure (“asset-specific component”). The asset-specific component covers collateral-dependent loans and risk-rated loans that have been placed on nonaccrual status.
Portfolio-based component
The portfolio-based component begins with a quantitative calculation that considers the likelihood of the borrower changing delinquency status or moving from one risk rating to another. The quantitative calculation covers expected credit losses over an instrument’s expected life and is estimated by applying credit loss factors to the Firm’s estimated exposure at
default. The credit loss factors incorporate the probability of borrower default as well as loss severity in the event of default. Expected credit losses are derived using a weighted average of five internally developed macroeconomic scenarios over an eight-quarter forecast period, followed by a single year straight-line interpolation to revert to long run historical information for periods beyond the eight-quarter forecast period. The five macroeconomic scenarios consist of a central, relative adverse, extreme adverse, relative upside and extreme upside scenario, and are updated by the Firm’s central forecasting team. The scenarios take into consideration the Firm’s macroeconomic outlook, internal perspectives from subject matter experts across the Firm, and market consensus and involve a governed process that incorporates feedback from senior management across LOBs, Corporate Finance and Risk Management.
The quantitative calculation is adjusted to take into consideration additional qualitative factors, including model imprecision, emerging risk assessments, trends, changes to the weights of the Firm’s macroeconomic scenarios and other subjective factors that are not yet reflected in the calculation. These adjustments are accomplished in part by analyzing the historical loss experience, including during stressed periods, for each major product or model. In addition, management takes into account uncertainties associated with the economic and political conditions, quality of underwriting standards, borrower behavior, credit concentrations or deterioration within an industry, product or portfolio, as well as other relevant internal and external factors affecting the credit quality of the portfolio. In certain instances, the interrelationships between these factors create further uncertainties.
The application of different inputs into the quantitative calculation, and the assumptions used by management to adjust the quantitative calculation, are subject to significant management judgment, and emphasizing one input or assumption over another, or considering other inputs or assumptions, could affect the estimate of the allowance for loan losses and the allowance for lending-related commitments.
Asset-specific component
To determine the asset-specific component of the allowance, collateral-dependent loans (including those loans for which foreclosure is probable) and nonaccrual risk-rated loans in the wholesale portfolio segment are generally evaluated individually.
For collateral-dependent loans, the fair value of collateral less estimated costs to sell, as applicable, is used to determine the charge-off amount for declines in value (to reduce the amortized cost of the loan to the fair value of collateral) or the amount of negative allowance that should be recognized (for recoveries of prior charge-offs associated with improvements in the fair value of the collateral).
For non-collateral dependent loans, the Firm generally measures the asset-specific allowance as the difference between the amortized cost of the loan and the present value of the cash flows expected to be collected, discounted at the loan’s effective interest rate. Subsequent changes in impairment are generally recognized as an adjustment to the allowance for loan losses. The asset-specific component of the allowance for non-collateral dependent loans incorporates the effect of the modification on the loan’s expected cash flows including changes in interest rates, principal forgiveness, and other concessions, as well as management’s expectation of the borrower’s ability to repay under the modified terms.
Estimating the timing and amounts of future cash flows is highly judgmental as these cash flow projections rely upon estimates such as loss severities, asset valuations, the amounts and timing of interest or principal payments (including any expected prepayments) or other factors that are reflective of current and expected market conditions. These estimates are, in turn, dependent on factors such as the duration of current overall economic conditions, industry, portfolio, or borrower-specific factors, the expected outcome of insolvency proceedings as well as, in certain circumstances, other economic factors. All of these estimates and assumptions require significant management judgment and certain assumptions are highly subjective.
Other financial assets
In addition to loans and investment securities, the Firm holds other financial assets that are measured at amortized cost on the Consolidated balance sheets, including credit exposures arising from lending activities subject to collateral maintenance requirements. Management estimates the allowance for other financial assets using various techniques considering historical losses and current economic conditions.
Credit risk arising from lending activities subject to collateral maintenance requirements is generally mitigated by factors such as the short-term nature of the activity, the fair value of collateral held and the Firm’s right to call for, and the borrower’s obligation to provide additional margin when the fair value of the collateral declines. Because of these mitigating factors, these exposures generally do not require an allowance for credit losses. However, management may also consider other factors such as the borrower’s ongoing ability to provide collateral to satisfy margin requirements, or whether collateral is significantly concentrated in an individual issuer or in securities with similar risk characteristics. If in management’s judgment, an allowance for credit losses for these exposures is required, the Firm estimates expected credit losses based on the value of the collateral and probability of borrower default.
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 for further information on the allowance for credit losses on investment securities.
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2025
Year ended December 31,
(in millions)		Consumer,
excluding
credit card		Credit cardWholesaleTotal
Allowance for loan losses
Beginning balance at January 1,$1,807 $14,600 $7,938 $24,345 
Cumulative effect of a change in accounting principle(a)
NANANANA
Gross charge-offs1,089 

9,164 1,787 12,040 
Gross recoveries collected(510)(1,492)(189)(2,191)
Net charge-offs579 

7,672 1,598 9,849 
Provision for loan losses692 8,629 1,943 11,264 
Other
— 

— 5 5 
Ending balance at December 31,$1,920 $15,557 $8,288 $25,765 
Allowance for lending-related commitments
Beginning balance at January 1,
$82 $— $2,019 $2,101 
Provision for lending-related commitments
1 2,200 
(f)
768 2,969 
Other
— — 1 1 
Ending balance at December 31,$83 $2,200 $2,788 $5,071 
Total allowance for investment securitiesNANANA$106 
Total allowance for credit losses(b)
$2,003 $17,757 $11,076 $30,942 
Allowance for loan losses by impairment methodology
Asset-specific(c)
$(647)$— $707 $60 
Portfolio-based2,567 15,557 7,581 25,705 
Total allowance for loan losses$1,920 $15,557 $8,288 $25,765 
Loans by impairment methodology
Asset-specific(c)
$3,457 $— $4,391 $7,848 
Portfolio-based365,284 247,797 787,976 1,401,057 
Total retained loans$368,741 $247,797 $792,367 $1,408,905 
Collateral-dependent loans
Net charge-offs$7 

$— $542 $549 
Loans measured at fair value of collateral less cost to sell
3,412 — 1,852 5,264 
Allowance for lending-related commitments by impairment methodology
Asset-specific
$— $— $119 $119 
Portfolio-based83 2,200 
(f)
2,669 4,952 
Total allowance for lending-related commitments(d)
$83 $2,200 $2,788 $5,071 
Lending-related commitments by impairment methodology
Asset-specific
$— $— $925 $925 
Portfolio-based(e)
24,358 23,617 
(g)
555,047 603,022 
Total lending-related commitments
$24,358 $23,617 $555,972 $603,947 
(a)Represents the impact to the allowance for loan losses upon the adoption of the Financial Instruments - Credit Losses: Troubled Debt Restructurings accounting guidance. Refer to Note 1 for further information.
(b)At December 31, 2025, 2024 and 2023, in addition to the allowance for credit losses in the table above, the Firm also had an allowance for credit losses of $288 million, $268 million and $243 million, respectively, associated with certain accounts receivable in CIB.
(c)Includes collateral-dependent loans, including those for which foreclosure is deemed probable, and nonaccrual risk-rated loans.
(d)The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
(e)At December 31, 2025, 2024 and 2023, lending-related commitments excluded $19.2 billion, $19.2 billion and $17.2 billion, respectively, for the consumer, excluding credit card portfolio segment; $1.2 trillion, $1.0 trillion and $915.7 billion, respectively, for the credit card portfolio segment; and $40.0 billion, $20.5 billion and $19.7 billion, respectively, for the wholesale portfolio segment, which were not subject to the allowance for lending-related commitments.
(f)Represents the impact of the Apple Card transaction.
(g)Includes estimated drawn loans related to the Apple Card transaction at the time that the transaction is expected to close of approximately $23 billion.
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20242023
Consumer,
excluding
credit card		Credit cardWholesaleTotalConsumer,
excluding
credit card		Credit cardWholesaleTotal
$1,856 $12,450 $8,114 $22,420 $2,040 $11,200 $6,486 $19,726 
NANANANA(489)(100)2 (587)
1,299 8,198 1,022 10,519 1,151 5,491 1,011 7,653 
(625)(1,056)(200)(1,881)(519)(793)(132)(1,444)
674 7,142 822 8,638 632 4,698 879 6,209 
624 9,292 578 10,494 936 6,048 2,484 9,468 
1 — 68 69 1 — 21 22 
$1,807 $14,600 $7,938 $24,345 $1,856 $12,450 $8,114 $22,420 
$75 $— $1,899 $1,974 $76 $— $2,306 $2,382 
7 — 121 128 (1)— (407)(408)
— — (1)(1)— — — — 
$82 $— $2,019 $2,101 $75 $— $1,899 $1,974 
NANANA$152NANANA$128 
$1,889 $14,600 $9,957 $26,598 $1,931 $12,450 $10,013 $24,522 
$(728)$— $526 $(202)$(876)$— $392 $(484)
2,535 14,600 7,412 24,547 2,732 12,450 7,722 22,904 
$1,807 $14,600 $7,938 $24,345 $1,856 $12,450 $8,114 $22,420 
$2,805 $— $3,912 $6,717 $3,287 $— $2,338 $5,625 
373,529 232,860 686,484 1,292,873 393,988 211,123 670,134 1,275,245 
$376,334 $232,860 $690,396 $1,299,590 $397,275 $211,123 $672,472 $1,280,870 
$1 $— $324 $325 $6 $— $180 $186 
2,696 — 1,834 4,530 3,216 — 1,012 4,228 
$— $— $109 $109 $— $— $89 $89 
82 — 1,910 1,992 75 — 1,810 1,885 
$82 $— $2,019 $2,101 $75 $— $1,899 $1,974 
$— $— $737 $737 $— $— $464 $464 
25,608 19 510,254 

535,881 28,248 — 516,577 544,825 
$25,608 $19 $510,991 $536,618 $28,248 $— $517,041 $545,289 
Discussion of changes in the allowance
The allowance for credit losses as of December 31, 2025 was $31.2 billion, reflecting a net addition of $4.4 billion from December 31, 2024.
The net addition to the allowance for credit losses included:
•$3.3 billion in consumer, driven by $2.2 billion related to the Apple Card transaction, loan growth in Card Services and the impact of changes in the Firm's weighted-average macroeconomic outlook, partially offset by reduced borrower uncertainty, and
•$1.1 billion in wholesale, driven by net increases in the loan and lending-related commitment portfolios, an update to loss assumptions on certain leveraged loans, and net changes in credit quality of client-specific exposures, partially offset by the impact of changes in the Firm's weighted-average macroeconomic outlook and a reduction due to the impact of charge-offs.
The Firm's qualitative adjustments and its weighted-average macroeconomic outlook continued to include additional weight placed on the adverse scenarios to reflect ongoing uncertainties and downside risks related to the geopolitical and macroeconomic environment. During 2025, the Firm further increased the weight placed on the adverse scenarios.
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 following table, resulting in:
•a weighted average U.S. unemployment rate peaking at 5.8% in the fourth quarter of 2026, and
•a weighted average U.S. real GDP level that is 2.1% lower than the central case at the end of the second quarter of 2027.
The following table presents the Firm’s central case assumptions for the periods presented:
Central case assumptions
at December 31, 2025
2Q264Q262Q27
U.S. unemployment rate(a)
4.6 %4.4 %4.2 %
YoY growth in U.S. real GDP(b)
2.0 %1.8 %1.9 %
Central case assumptions
at December 31, 2024
2Q254Q252Q26
U.S. unemployment rate(a)
4.5 %4.3 %4.3 %
YoY growth in U.S. real GDP(b)
2.0 %1.9 %1.8 %
(a)Reflects quarterly average of forecasted U.S. unemployment rate.
(b)The year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percentage 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 12 for additional information on the consumer and wholesale credit portfolios.