But wage increases could mean higher prices for customers, as well as the arrival other “labor saving” measures.
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Known as the bank with the ironclad balance sheet, JPMorgan impressed yet again with its most recent earnings report. That compares with the consensus estimate $23.41B and $1.25/share, respectively. On a per share basis, the bank earned $1.55, compared with $1.54 a year earlier as the amount of shares outstanding decreased.
“JPMorgan Chase continued to perform well in all of our major businesses”, said Jamie Dimon, JPMorgan Chase chairman and CEO.
JPMorgan’s results showed some sore spots. The revenue figure included $3.96 billion from fixed-income trading, a 35 per cent increase, beating the $3.57 billion estimate of analysts. Its segments are Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset Management. Revenue per employee at JPMorgan now sits at $417,740, almost 20 times the income of a full-time wage earner.
But chief financial officer Marianne Lake said “it’s very early days” as far as knowing how Brexit will affect the bank’s operations in Europe. Trading maintained momentum through the second half of June, instead of tapering off as it has done so historically, possibly as a result of the U.K.’s vote to leave the European Union.
JPMorgan Chase said employees in 75 cities will get pay bumps. According to the latest Fortune list of most profitable companies, JPMorgan Chase is the second most profitable US company behind Apple.
JPMorgan will invest more than $200 million this year training entry-level employees in its consumer banking business, an effort that has helped more than 40 percent of the bank’s tellers get promoted within five years. Mortgage banking revenue rose 5% to $1.9 billion.
Bank stocks plummeted after the vote and yields on 10-year Treasury notes fell to a record, draining financial firms of interest income. But wage increases at one bank are not enough: “all retail banks must work to cease the predatory banking practices and aggressive sales metrics systems that create the hostile work conditions which harm bank workers and consumers alike”. While the bank’s charge-offs rose in the quarter, Lake said that was largely due to the bank “opening the credit box”, a term used by bankers to say they are making loans to people who wouldn’t have qualified before.
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JPMorgan Chase CEO Jamie Dimon published an op-ed in Tuesday’s New York Times announcing that 18,000 JPMorgan Chase employees will see pay raises in the next three years. Shares of JPMorgan Chase were up 2%, while Bank of America’s stock has gained 1.7% a little more than halfway through the trading day.
