JPMorgan Chase Executives said the bank will increase share buybacks to avoid further building up tens of billions of dollars in excess cash.

Fresh off a year of record profits and revenue, JPMorgan is facing questions about what Chief Financial Officer Jeremy Barnum admitted was a "high-level problem": The bank has about $35 billion in unfunded funds, according to some estimates. needs to be met. Regulators, or what analysts call “excess capital.”

"We don't want to see excessive growth here," Barnum told analysts on Wednesday. "Given the amount of organic capital generation that we're generating, that means that -- unless we find an opportunity in the near term, organically deployed or otherwise -- —That means greater returns on capital through buybacks.”

The bank has heard from investors and analysts who want to know what JPMorgan plans to do with the cash. The largest U.S. bank by assets has been hoarding earnings to prepare for Basel 3 rules that will require more capital, but Wall Street analysts now believe the incoming Trump administration may More moderate measures will be proposed.

Back in May, when the issue was raised at the bank's annual investor day, CEO Jamie Dimon bristled at the idea of ​​expanding stock purchases, with the company's shares trading at nearly 52 The weekly high was $205.88.

"I want to be clear, okay? We're not buying back a lot of stock at these prices," Dimon said at the time.

That's because the company's valuation is too high even in his own view, Dimon said: "Repurchasing a financial company's stock for substantially more than twice its tangible book value is a mistake. We won't do it."

The bank's stock has appreciated since then: A shares are now trading 22% higher than when Dimon made those comments.

In an effort to resist calls to cut its cash reserves more than it deems necessary, JPMorgan signaled there could be tougher times ahead. Dimon and others have been warning that a recession is coming since at least 2022, but it has not yet arrived and the end of the economic cycle remains far off.

Barnum returned to the topic on Wednesday, telling reporters there was a "tension" between economic risks and high asset prices in the market; he said the bank therefore had to be prepared for "a variety of scenarios."

Portales Partners analyst Charles Peabody said a sharp economic downturn would give the bank an opportunity to deploy more of its estimated $35 billion in excess cash through lending.

"I think JPMorgan will be disciplined and not waste capital," Peabody said. "The best time to capture market share is after a recession because your competitors are somewhat damaged. I expect he will start from Withdrawal of share buybacks at current levels despite pressure from shareholders for more action."