JPMorgan continues to surprise me on their efforts to return capital to shareholders. They have increased their buyback authorization, which is front-end weighted in 1H’16, which means that it’s an accelerated buyback. Credit Suisse anticipates that it will weigh more favorably on earnings/sales by a couple percentage points, but the level of capital returns should increase as the G-SIFI surcharge by the Federal Reserve will be reduced by a percentage point in a more optimistic scenario. Source: Freestockcharts It seems bank are a little over capitalized, and to be frank, JPMorgan has enough high quality liquid assets to offset their exposure to derivatives in their trading book, which implies that another incident similar to the London Whales probably won’t materialize for quite a while. Of course, even if I anticipate the statistical probabilities of another trading loss of that scale to be quite low, there’s no denying that carrying heavier exposure to some risky assets can bite them later. The company will return $3.18 billion in 1H’16 as opposed to expectations for $1.3 billion in capital returns in the first half. That’s more than double what investors were expecting. The impact on the share price have been quite huge, and I anticipate more incremental activities to return capital to shareholders in future years. JPMorgan Chase had the highest amount of Tier 1 Capital among banks at $188 billion which compares to Bank of America at $173.2 billion and Citigroup at $168 billion. A 1% return of tier 1 capital to shareholders via share buyback will have the most impact for JPMorgan shareholders when compared to other banks according to Credit Suisse research. As such, I view JPMorgan best in class in terms of risk quality and asset quality. The banks still sports solid fundamentals and EPS will continue to grow at a brisk pace above 12% per annum over the next three years assuming a stable macro environment. The stock could easily reach $70 over the next three-months, so buying at these levels still makes sense.