JPMorgan 33% profit jump beats estimates on reserve releases

Job Cuts

Consumer and community banking, which includes home loans and checking accounts, had net income of $2.59 billion, down 12% from a year earlier.

“The consumer and community bank is 50% of JPMorgan and it’s not growing,” Peabody said. “Mortgage is shrinking, cards are flat and the branch system is just growing a little bit.”

The bank, which employed about 259,000 people at the end of December, has said it will cut 13,000 to 15,000 jobs in its mortgage unit and 3,000 to 4,000 in community banking excluding home lending through the end of next year. Total headcount fell to about 255,900 by the end of March, and will shrink by about 4,000 people this year, the bank has said.

Lending at U.S. banks was little changed at $7.2 trillion from the fourth to the first quarter, according to Fed data. Demand for loans was flat even as the U.S. unemployment rate fell during all three months of the period, dropping to 7.6% in March.

More Sanctions

Under regulatory orders to tighten internal controls following the trading loss, JPMorgan will face more sanctions in the coming months, Dimon told shareholders in a letter released April 10.

The Fed and Office of the Comptroller of the Currency took the first regulatory actions against the bank for the credit- derivatives trade in January, ordering it to strengthen risk controls and enhance executive pay practices. The board was also directed to take into consideration control weaknesses and “adverse risk outcomes” in compensation awards for Dimon and other top managers.

Directors urged investors in March to vote against a shareholder proposal that would strip Dimon of his chairman title. They said the current structure remains the “most effective leadership model” for JPMorgan. A similar proposal last year failed with 40% of the vote.

Separating the titles is “a board-level decision,” Dimon told reporters today on a conference call. “I’m not going to deal with hypotheticals.”

The board cut his pay in half for 2012 after concluding that he bore some responsibility for the trading loss.

<< Page 3 of 3

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome