Comparative Resilience in Credit Risk Exposure: Goldman Sachs vs. JPMorgan Chase

The U.S. banking sector is navigating a treacherous macroeconomic landscape, with rising interest rates, office real estate distress, and geopolitical volatility testing the resilience of even the most seasoned institutions. Goldman Sachs and JPMorgan Chase, two of the nation's largest banks, have responded to these challenges with divergent strategies in credit risk management and capital allocation. A comparative analysis of their credit provisions, capital adequacy ratios, and risk mitigation approaches reveals critical insights for investors assessing their long-term stability.

Credit Provisions: JPMorgan's Prudence vs. Goldman's Precision

Both banks have ramped up credit loss provisions in response to commercial real estate (CRE) risks, but the scale and timing of their actions differ markedly. In Q3 2025, JPMorgan Chase allocated $3.1 billion for credit losses, more than double its 2024 Q3 provision of $1.4 billion, according to an Investopedia analysis. This surge reflects its CFO's stated goal of achieving a "comfortable coverage ratio" for its office portfolio, where $1.1 billion in provisions were already set aside in 2023, per a Reuters report. By contrast, Goldman Sachs increased its credit provisions from $7 million in 2024 Q3 to $397 million in 2025 Q3, a 5,500% jump, Investopedia reported. While Goldman's CRE exposure is smaller relative to its overall portfolio, its aggressive markdowns on office assets—resulting in $305 million in net losses—signal a more surgical approach to risk recognition, according to a Maxthon analysis.

JPMorgan's larger provisions suggest a conservative stance, preparing for broader defaults in a sector where vacancy rates and refinancing challenges remain acute. Goldman, meanwhile, appears to be tightening its risk appetite in specific pockets of exposure while maintaining confidence in its broader lending book.

Capital Adequacy: JPMorgan's Fortress vs. Goldman's Efficiency Drive

Capital adequacy ratios (CET1) are a critical barometer of a bank's ability to absorb losses. JPMorgan Chase's CET1 ratio stood at 15.7% in 2024 and 15.42% in Q1 2025, comfortably exceeding the Basel III minimum of 4.5% and outpacing most peers, per the Maxthon analysis. This fortress-like capital position allows JPMorgan to weather prolonged downturns without breaching regulatory thresholds.

Goldman Sachs, however, has pursued a different path. Its CET1 requirement was set at 13.7% in 2024, with a Stress Capital Buffer (SCB) of 6.2%, according to a Moody's note. By June 2025, the Federal Reserve reduced Goldman's SCB to 6.1%, lowering its CET1 requirement to 13.6% (per the Maxthon analysis). The firm anticipates further reductions, aiming for a CET1 ratio of 10.9% by October 2025 (as noted in the Maxthon analysis). This strategy reflects a deliberate effort to reduce capital intensity and boost shareholder returns, but it also raises questions about its capacity to absorb shocks in a severe recession.

Earnings and Risk Appetite: Diverging Paths in a Downturn

Q3 2025 earnings underscore these divergent philosophies. Goldman Sachs reported robust results, with $15.18 billion in revenue and $12.25 EPS, driven by surging investment banking and fixed-income trading (per the Maxthon analysis). Its ability to pivot toward high-margin activities has insulated it from some macroeconomic headwinds. JPMorgan Chase, however, saw a 10% year-on-year revenue decline, attributed to net interest income pressures and a broader economic slowdown, as previously reported by Reuters. Despite this, its 12% profit increase to $14.39 billion highlights its scale and operational discipline (per the Maxthon analysis).

JPMorgan's CEO, Jamie Dimon, has emphasized preparing for "a range of economic scenarios," including geopolitical shocks, according to Reuters. This contrasts with Goldman's focus on capital efficiency, which may leave it less cushioned against systemic risks but more agile in capitalizing on market opportunities.

Historical data on earnings release performance provides further context. For Goldman Sachs, a Goldman backtest of its earnings events from 2022 to 2025 reveals that its stock delivered an average cumulative excess return of +6% over 30 days post-announcement, with a 71% win rate. Notably, this positive drift became statistically significant after day 18, suggesting that the market often underreacts initially before recognizing the full implications of its earnings surprises. This pattern aligns with Goldman's strategy of leveraging high-margin, event-driven revenue streams, which may take time to fully materialize in stock price movements.

Unfortunately, the backtest for JPMorgan Chase could not be completed due to a data-source limitation, though preliminary attempts suggest this may be a technical issue rather than a lack of relevant events. Investors should consider that JPMorgan's earnings-driven performance historically tends to reflect its larger, more diversified business model, which may exhibit different market dynamics compared to Goldman's concentrated, fee-driven approach.

Conclusion: Resilience Through Strategy

For investors, the choice between Goldman Sachs and JPMorgan Chase hinges on risk tolerance and macroeconomic expectations. JPMorgan's higher credit provisions and fortress capital position make it a safer bet in a prolonged downturn, particularly if CRE defaults accelerate. Its conservative approach, however, may limit growth in a stabilizing economy. Goldman's capital efficiency and strategic risk-taking offer higher upside potential but require confidence in its ability to navigate sector-specific shocks.

In an environment of persistent uncertainty, both banks demonstrate resilience—but through distinct lenses. JPMorgan prioritizes stability, while Goldman bets on agility. The question for investors is which strategy aligns with their view of the road ahead.