JPMorgan's Liquidity Buffer: Paving the Way for Shareholder Rewards?

JPMorgan JPM, the largest U.S. bank, enjoys a strong liquidity position. As of June 30, 2025, cash and due from banks and deposits with banks were $420.3 billion. As of the same date, total debt was $485.1 billion (the majority of this is long-term in nature).

Additionally, JPM maintains investment-grade long-term credit ratings of A, AA- and A1 from Standard and Poor’s, Fitch Ratings and Moody’s Investors Service, respectively, and a stable outlook. Further, the company’s diversified, digitally enabled business model and structural deposit advantage underpin resilient earnings and enable robust capital returns. 

Hence, the company’s enhanced capital return plan received the green signal from the Federal Reserve following the 2025 stress test. Also, effective Oct. 1, its preliminary stress capital buffer (SCB) will decline to 2.5% from the current 3.3%, a meaningful improvement for a systemically important financial institution like JPMorgan. The reduction strengthens flexibility by lowering the capital the bank must retain under adverse conditions.

As such, JPMorgan launched a new $50 billion share repurchase plan (became effective July 1). The bank also intends to raise its dividend by 7% to $1.50 per share. In March, it increased its quarterly dividend by 12% to $1.40 per share, while in September 2024, it announced a 9% hike in the quarterly dividend to $1.25 per share. In the past five years, the company increased its dividends five times at an annualized growth rate of 7.99%. 

With robust liquidity, impressive profitability, a strong capital base and reduced SCB, JPMorgan is well-positioned to sustain higher dividends and aggressive share repurchases.

How is JPM Placed in Terms of Liquidity Compared With Peers?

JPMorgan’s two close peers are Bank of America BAC and Citigroup C.

Like JPM, Bank of America has a robust liquidity position. As of June 30, 2025, the bank had a total debt of $760.8 billion (the majority of this is long-term in nature). Its cash and cash equivalents were $266 billion on the same date. Hence, the company continues to reward shareholders handsomely. 

Following the clearance of the 2025 stress test, Bank of America launched a $40 billion share repurchase plan (became effective Aug. 1) and raised its quarterly dividend by 8% to 28 cents per share. Additionally, it plans to buy back shares worth nearly $4.5 billion every quarter in the near term.

Similarly, Citigroup boasts of a solid liquidity position. As of June 30, 2025, its cash and due from banks and total investments aggregated $474.4 billion, while its total debt (short-term and long-term borrowing) was $373.3 billion. This helps the company focus on enhancing capital distribution activities.

Post-clearing the 2025 Fed stress test, the company hiked its dividend 7% to 60 cents per share. In January, Citigroup's board of directors approved a $20 billion common stock repurchase program with no expiration date. As of June 30, 2025, $16.3 billion worth of authorization remained available.

JPMorgan’s Price Performance, Valuation and Estimates

JPMorgan’s shares have gained 13.9% in the past six months, outperforming the S&P 500 Index’s gain of 10.7%. 

From a valuation standpoint, JPM trades at a 12-month trailing price-to-tangible book (P/TB) of 3.02X, above the industry average.

The Zacks Consensus Estimate for JPMorgan’s 2025 earnings implies a decline of 2.2% on a year-over-year basis, while 2026 earnings are expected to grow at a rate of 5.3%. In the past 30 days, earnings estimates for 2025 and 2026 have moved upward.

JPM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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