Apple Card impacts JP Morgan, causing a decline in profits

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The Apple Card remains an expensive business for banks. After Goldman Sachs withdrew from its partnership with Apple, JP Morgan Chase entered the credit card program. The consequences are clearly visible in the current financial figures. In the fourth quarter of 2025, JP Morgan Chase experienced a significant decline in profits. A major contributing factor is the acquisition of the Apple Card.

The Apple Card was long considered a strategically attractive product with significant customer potential. In practice, however, the program proved to be a financial burden. Goldman Sachs lost money on the Apple Card for years and eventually exited the business. JP Morgan Chase took over the partnership, knowing that high initial costs would be incurred. This period is now reflected in the latest quarterly results.

Profit slump at JP Morgan Chase in the fourth quarter

According to the Wall Street Journal, JP Morgan Chase's profits fell by 7 percent in the fourth quarter of 2025, reaching approximately $13 billion. Several factors contributed to this decline.

On the one hand, investment banking revenues were lower than expected. Certain transactions took longer than planned, resulting in delayed fee recognition. However, the biggest burden was the Apple Card.

Apple Card as the main cost factor

With the acquisition of Apple Card, JP Morgan Chase incurred costs of $2.2 billion. This money was not caused by direct losses, but was deliberately set aside. It represents provisions for potential future credit defaults by Apple Card customers.

The company anticipates that some of the loans granted will not be fully repaid. The provisions are intended to mitigate these expected defaults and are considered a precautionary measure.

Legacy issues from the Goldman Sachs era

The reason for the high provisions lies in the structure of the acquired loan portfolio. Goldman Sachs is said to have accepted many customers with lower credit ratings for the Apple Card. Statistically, these customers have a higher risk of default.

A similar problem arose with another consumer credit card program by Goldman Sachs with General Motors, which also failed. Both programs were considered too risky internally.

During the initial negotiations in 2024 regarding Goldman Sachs' exit from the Apple deal, it was revealed that the outstanding balances on the Apple Card amounted to approximately $17 billion. For comparison, the outstanding balances on the GM credit card were around $2 billion. These figures illustrate the scale of the risk assumed.

Specific impact on the quarterly result

Provisions related to the Apple Card significantly impacted JP Morgan Chase's fourth-quarter results. Earnings per share fell by approximately 60 cents. Additionally, the company missed its own forecast for investment banking fees, further increasing the pressure on quarterly results.

The overall annual results remain strong nonetheless

Despite the challenges posed by the Apple Card, analysts view the overall business performance positively. In 2025, JP Morgan Chase's revenue increased by 3 percent to $182.4 billion. Net income was approximately $57 billion.

However, the result fell short of the previous year. In 2024, JP Morgan Chase earned approximately US$58.5 billion. This figure was considered a record profit for a US bank.

High provisions are slowing down JP Morgan Chase because of the Apple Card

The Apple Card has proven to be an expensive acquisition for JP Morgan Chase in the short term. The decline in profits in the fourth quarter of 2025 is primarily attributable to high provisions for potential loan losses. At the same time, the full-year financial statement shows that the institution remains financially stable. Whether the Apple Card will pay off in the long run depends on how well the acquired loan portfolio is managed and future defaults are limited. (Image: Shutterstock / David Finley)