Jamie Dimon has long joked that his retirement is five years away, no matter when he’s asked. But not on May 20.
The chief executive officer of JPMorgan Chase & Co. told shareholders the timetable is “not five years anymore”, in response to a question about how long he planned to remain CEO. The largest US bank is “well on the way” with its succession plans, he said during the firm’s investor day.
The question of who might steward the firm after Dimon — who has held the top job since 2006 — has loomed over the industry. Earlier this year — about halfway through Dimon’s five-year retention package — the 68-year-old CEO moved some of his top lieutenants into new senior roles, positioning them for more experience running the firm’s operations as he prepares potential successors.
The shuffle placed Jenn Piepszak and Troy Rohrbaugh atop an expanded commercial and investment bank while Marianne Lake, who had co-led the consumer and community bank alongside Piepszak since 2021, got sole control of the segment, overseeing more of its business lines.
“It’s up to the board — it’s not up to me,” Dimon said on May 20. “I have the energy that I’ve always had. That’s important. I think when I can’t put the jersey on and give it my fullest, I should leave, basically.”
Reviewing the days’ presentations from the leaders of JPMorgan’s various business lines, Dimon tempered expectations from some analysts that the bank’s excess capital might support increased share buybacks.
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“We’re not going to buy back a lot of stock at these prices,” he said, adding that the bank will be more aggressive about repurchases when its stock price declines. The shares, which closed at a record high last week, fell after his comments and ended the day 4.5% lower. They’re still up 15% this year.
Guidance boost
The bank raised its forecast for this year’s net interest income (NII) to US$91 billion ($122.72 billion) after last month predicting a US$90 billion haul, on less than expected interest rate cuts by the Federal Reserve.
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Fewer customers are also shifting money to higher-yielding accounts than anticipated, according to the bank. In the first quarter, JPMorgan had posted US$23.1 billion of NII, breaking a streak of seven quarters of a record for the metric.
JPMorgan also offered details of potential fallout from a proposed plan to increase capital requirements for big banks. Fed officials have indicated that the proposals, known as Basel III Endgame, will be pared back. Bloomberg reported that agencies are working on a new version that could be finalised as soon as August.
Even with the potential for stricter capital requirements, JPMorgan expects to deliver a 17% return on tangible common equity over the medium term, it said in its presentation.
Basel blasted
Dimon, who has long been the most vocal critic of the Basel proposals among his Wall Street peers, reiterated his criticisms that they’ll hurt the poorest consumers, pushing some outside the banking system. Regulation is “damaging America at this point”, he said.
JPMorgan earlier on May 20 said that two-thirds of consumers would likely have to pay a monthly service fee for their checking accounts if the current proposals are implemented. JPMorgan said that doesn’t reflect its current plans for dealing with the rules.
The regulation onslaught, as consumer and community bank CEO Lake called it during her presentation, has the potential to profoundly impact consumers, she said.
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“These rules have not been adequately studied, and the people who will end up being impacted the most will be everyday Americans, in particular those who can least afford it,” Lake said.
Mid-teens boost
As well as Lake, investors also heard from Piepszak and Rohrbaugh about progress in JPMorgan’s commercial and investment bank.
JPMorgan expects the emergence of a deal rebound to help bolster investment-banking fees for the second quarter by a percentage in the “mid teens” compared with a year earlier, Rohrbaugh said.
For the markets business, the increase will probably be in the “mid-single digits”, he said.
