JPMorgan Chase & Co’s JPM-N CEO Jamie Dimon did not signal any plans to cut short his tenure, saying he still has the same intensity for his job leading the largest U.S. bank, although he said with a laugh at the bank’s investor day that he is planning to remain another “three and a half” years.
Dimon stressed on Monday the bank’s plans regarding his tenure were unchanged, although did not give specifics.
“I’m not going to change, I’m not going to play golf, I love my country, my company, my family,” said Dimon. “I can’t do this forever, I know that, but my intensity is the same. When I don’t have this kind of intensity, I should leave.”
Dimon, 67, added that he felt great about the next generation of management and gave latitude to the board.
“One of the most important governance things is that once a year the board meets without the CEO,” Dimon said. “If you want to give a board discretion and ability to talk to each other, it’s not to have me in the room.”
Succession plans of Wall Street giants have come into focus after Morgan Stanley chief James Gorman outlined steps last week to hand over reins in twelve months.
Among possible executives to succeed Dimon is President and Chief Operating Officer Daniel Pinto. He was identified “as a key executive who is immediately ready to step into the role of sole CEO, should the need arise in the near-term,” according to a company filing.
At the investor day, JPM said net interest income will rise $3 billion as it brings in more in interest payments from its purchase of failed First Republic Bank this year, executives told investors on Monday.
The largest U.S. lender expects its net interest income to rise to $84 billion from higher interest payments in 2023, increasing an earlier forecast of $81 billion, after it bought First Republic FRC-N, which was shuttered by authorities this month.
Integration costs from the deal will add $3.5 billion to its expenses this year, adding to an earlier forecast of $81 billion. The Wall Street giant is in the process of integrating the regional lender, which will likely take about 12 months.
JPMorgan said it remains optimistic. It emerged as one of the biggest beneficiaries of the recent banking crisis due to an influx of deposits from customers who sought safety in larger institutions.
First Republic was the third U.S. regional lender to fail since March in a sector-wide upheaval that roiled financial stocks, deepened worries of a crisis and heaped pressure on mid-sized banks.
The bank failures revealed cracks in balance sheets as rising interest rates eroded values of debt portfolios and worsened commercial real estate loans.
“We cannot ignore that there are plenty of challenges at this time and sources of uncertainty,” said JP Morgan President and Chief Operating Officer Daniel Pinto.
While the global and U.S. economies are doing fine, there are signs of deterioration as consumers erode their saving buffers, interest rates rise and inflation remains persistent, Pinto added.
Economists have cautioned that a U.S. default could trigger a market sell-off, a surge in borrowing costs and a blow to the global economy that could rival the 2008 crash.
Revenues for investment banking and trading are both expected to decline by 15% in the second quarter, Pinto said, adding that he expects market volatility to increase as central banks approach the end of their monetary tightening cycles.
Shares of JPMorgan fell 0.7% to $138.14 on Monday.
Still, “high-grade bond deals are slowly coming back,” said global investment banking and corporate banking co-head Vis Raghavan.
Last week, a boom in investment-grade corporate bond deals, including Pfizer and Charles Schwab underscored that companies prefer borrowing sooner rather than later as executives do not expect rates to descend this year.
JPMorgan also restated its 17% target for return on tangible common equity – a key metric that measures how well a bank uses shareholder money to produce profit.
JPMorgan plans to modestly increase its branch footprint, said Jennifer Roberts, its CEO of consumer banking. The lender serves nearly 80 million customers and 5.7 million small businesses and is the first bank to have locations in all of the contiguous 48 U.S. states.
Wells Fargo analysts led by Mike Mayo said the bank’s presentation reflects the “Goliath is winning” theme.
“The slides reflect benefits of scale given its aim and ability to generate superior ROTCE on one of the highest capital levels among big banks,” the brokerage said in a note.