JPMorgan (JPM.US) is planning to increase its stock repurchases in order to address the issue of excess capital.

Bank executives at JPMorgan Chase (JPM.US) said the bank plans to increase stock buybacks to avoid further adding to its hundreds of billions of excess cash.

After recording record annual profits and revenues, JPMorgan Chase is facing questions from investors and analysts on how to handle its estimated $35bn of "excess capital." "We don't want excess capital to increase from where it is now, given the pace of capital we're creating now, and if we don't find new investment opportunities or other uses in the short term, then that means we're going to return more capital through stock buybacks," said Jeremy Barnum, the bank's chief financial officer, on Wednesday.

JPMorgan Chase, the largest bank in the US, has built up a large pile of profits in recent years to meet the planned Basel III rules, which would require banks to hold more capital. However, Wall Street analysts now believe the rules will be significantly relaxed under the incoming Trump administration.

As recently as May's annual investor conference, when asked whether the bank would significantly increase its stock buybacks, Jamie Dimon, the chief executive, said no. At the time, JPMorgan's shares were near a 52-week high of $205.88.

"Let me be clear. We're not going to buy a lot of stock at these prices," Mr Dimon said at the time, explaining that the company's valuation was too high, even by his own standards: "Buying stock in a financial company at two times tangible book value is a mistake. We're not going to do that."

However, since Mr Dimon made those comments, JPMorgan's shares have risen by 22 per cent.

Despite investor and analyst pressure to quickly cut its cash reserves, the bank has insisted it must prepare for potential economic volatility. Mr Dimon and other executives have repeatedly warned of an imminent recession since 2022, but it has not yet arrived and the end of the economic cycle is not yet in sight.

Mr Barnum again raised the issue on Wednesday, telling reporters that there was a "tension" between current economic risks and high asset prices in the market. As a result, the bank must prepare for "a wide range of scenarios."

If there were a significant recession, JPMorgan could deploy its $35bn of excess capital through loans and other means, according to Charles Peabody, an analyst at Portales Partners. "I think JPMorgan will be careful to avoid wasting capital and the best time to expand its market share after a recession is when competitors are hurt. I expect JPMorgan to reduce its stock buybacks from current levels, though shareholders would like to see more buybacks," he said.