Latest news with #JeremyBarnum
Yahoo
4 days ago
- Business
- Yahoo
JPM Expanding Footprint to Serve Affluent Clients: Buy, Sell or Hold?
JPMorgan JPM is expanding its affluent banking services by opening 14 new J.P. Morgan Financial Centers across California, Florida, Massachusetts and New York. These new branches, many of which were formerly First Republic Bank locations, bring the total number of such centers to 16. JPM has plans to nearly double the figure by to offer a personalized, high-touch experience for affluent clients, these centers feature private meeting spaces and a refined environment. They cater to clients eligible for J.P. Morgan Private Client, offering dedicated support from Senior Private Client Bankers and access to JPMorgan's full suite of wealth management and banking expansion reflects JPM's strategy to deliver a premium, relationship-based banking experience that spans personal banking, lending and investment services. In addition to the new centers, the company operates 14 remote offices nationwide, enabling flexible support through Relationship Managers for clients preferring virtual initiative aligns with JPMorgan's broader effort to tailor its branch network to client needs, combining digital tools, expert guidance and an expansive physical footprint. With these new financial centers, the bank is setting a new standard in serving affluent boasts the largest branch network in the United States and is the only bank with a physical presence in all 48 contiguous states. Last year, it opened more than 150 new branches and is on track to reach its goal of launching 500 additional locations by 2027. This continued expansion underscores the company's commitment to nationwide accessibility and its confidence in the enduring value of in-person banking relationships. Given the tariff-related uncertainty, market participants are predicting two to three interest rate cuts in the back half of the year. As such, JPMorgan's NII is likely to face some 'headwind on an exit rate going into next year' as its balance sheet is highly company's NII witnessed a five-year (2019-2024) CAGR of 10.1%, mainly driven by the high-interest rate regime since 2022 and the acquisition of First Republic Bank in 2023. The momentum continued in the first quarter of 2025, driven by solid loan and deposit growth and higher revolving balances in Card Services. During the Investors Day conference on May 19, JPM's chief financial officer, Jeremy Barnum, said, 'The evolving tariff environment, combined with the preexisting geopolitical tensions, adds significant uncertainty into the economic outlook.' Despite this, he believes the company's NII could increase by $1 billion this year, but stopped short of making the change in the NII outlook of $94.5 billion (up almost 2% year over year) as it's too early to comprehend the actual impact of various macroeconomic headwinds. Of the total NII, almost $4.5 billion is projected to be generated from Markets JPM, its close peers – Bank of America BAC and Wells Fargo WFC – expect NII to grow this year. Bank of America anticipates NII to jump 6-7% year over year, while Wells Fargo expects the metric to grow 1-3%. JPMorgan's capital markets business (that includes investment banking or IB and markets) witnessed a robust comeback last year, with IB fees (in the Commercial & Investment Bank segment) jumping 37% year over year. In 2023, IB fees declined 5% and plunged 59% in 2022. Likewise, as trading volume and market volatility remained high in 2024, markets revenues benefited and grew 7%. Despite tariff-related ambiguity and extreme market volatility, the performance of the company's capital markets business was decent in the first quarter of 2025. However, near-term IB prospects are cloudy because of economic uncertainty, which will likely hurt JPM's IB business in the second quarter as deal-making activities have largely stalled. IB fees in the Commercial & Investment Bank (CIB) segment are expected to be down in the mid-teens range from $2.46 billion in the prior-year the other hand, JPMorgan's markets revenues are projected to grow in the mid-to-high single-digits range for the second quarter of 2025. This is likely to be driven by a significant rise in market volatility and higher client once there is a reduction in the level of uncertainty, JPMorgan is expected to capitalize on it, driven by a solid pipeline and origination of new activity. Also, the company will leverage its leadership position in the IB business (rank #1 for global IB fees in the first quarter of 2025) once the macro situation changes. Hence, JPMorgan's long-term outlook for the IB business remains strong. JPMorgan has been growing through bolt-on acquisitions, both domestic and global. In 2023, the company increased its stake in Brazil's C6 Bank to 46% from 40%, allied with (a financial technology firm focused on trade finance) and acquired Aumni. Also, the company acquired the failed First Republic Bank in 2023. The deal continues to benefit JPM's financials and even helped it reach record profits. Additionally, in 2022, it acquired Renovite and a 49% stake in Greece-based Viva Wallet and Global Shares. These deals, along with several others, are expected to support the bank's plan to diversify revenues and expand the fee income product suite and consumer bank actively seeks to expand its digital retail bank – Chase – across the European Union countries after launching it in the U.K. in 2021. The company is focused on bolstering its IB and asset management businesses in China. As of March 31, 2025, JPM had a total debt of $471.9 billion (the majority of this is long-term in nature). The company's cash and due from banks and deposits with banks were $425.9 billion on the same date. The company maintains long-term issuer ratings A-/AA-/A1 ratings from Standard and Poor's, Fitch Ratings and Moody's Investors Service, JPM continues to reward shareholders handsomely. In March, the company announced a 12% hike in its quarterly dividend to $1.40 per share. This followed an 8.7% increase in dividends in September 2024. In the last five years, it hiked dividends five times, with an annualized growth rate of 6.77%. Currently, the company's payout ratio is 27% of earnings. Similar to JPM, its peers – Bank of America and Wells Fargo – have been increasing their dividend payouts regularly. Bank of America raised its dividend four times in the last five years, while Wells Fargo has hiked it six also authorized a new share repurchase program of $30 billion, effective July 1, 2024. As of March 31, 2025, almost $11.7 billion in authorization remained available. JPMorgan's asset quality has been deteriorating. While the company recorded negative provisions in 2021, a substantial jump in provisions was recorded in the years after that because of the worsening macroeconomic outlook. The metric surged 169% in 2022, 45.9% in 2023 and 14.9% in 2024. Similarly, net charge-offs (NCOs) grew 117.6% in 2023 and 39.1% in 2024. The uptrend for both continued in the first quarter of interest rates are less likely to come down substantially in the near term, it is expected to hurt the borrowers' credit profile. The company remains vigilant about the effects of continuous high rates and quantitative tightening on its loan portfolio. Also, the impact of tariffs on inflation is to be seen. Hence, the company's asset quality is likely to remain company expects card NCO rates to be approximately 3.6% this year. For 2026, the metric is expected to rise year over year and be in the range of 3.6-3.9%. This year, shares of JPMorgan have rallied 10.7% against a 1.8% decline for the S&P 500 Index. Also, the stock has fared better than its peers – Bank of America and Wells Fargo. YTD JPM Price Performance Image Source: Zacks Investment Research From a valuation perspective, the stock appears slightly expensive relative to the industry. The stock is currently trading at the forward 12-month price/earnings (P/E) of 14.17X. This is above the industry's 13.35X, reflecting a stretched valuation. Price-to-Earnings F12M Image Source: Zacks Investment Research Also, JPM stock is trading at a premium compared with its peers – Bank of America and Wells Fargo. At present, Bank of America has a forward 12-month P/E of 11.32X, and Wells Fargo is trading at a forward 12-month P/E of 12.02X. Earnings estimates for JPMorgan for 2025 and 2026 have been revised upward over the past seven days. The positive estimate revision depicts bullish analyst sentiments for the stock. JPM's Earnings Estimates Trend Image Source: Zacks Investment Research Nonetheless, the Zacks Consensus Estimate for JPM's 2025 earnings implies a 7.1% fall year over year because of macro headwinds and higher non-interest expenses. Management anticipates non-interest expenses to be almost $95 billion this year, up from $91.1 billion in 2024. On the other hand, the consensus estimate for 2026 earnings suggests 5% growth. Earnings Estimates Image Source: Zacks Investment Research JPMorgan's strategic expansion, resilient capital markets business, strong dividend growth and fortress balance sheet position it well for long-term gains. However, macroeconomic headwinds, including potential rate cuts, deteriorating asset quality and rising non-interest expenses, pose near-term risks. While the stock trades at a premium valuation, upward earnings revisions and JPM's industry leadership justify a cautious buy for long-term investors. Those seeking stability, income and exposure to a diversified banking giant may find JPMorgan attractive, but should be prepared for short-term volatility due to economic uncertainty and elevated credit currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report Wells Fargo & Company (WFC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
21-05-2025
- Business
- Globe and Mail
JPMorgan CEO Jamie Dimon Warns of 'Extreme Tariffs' and Stagflation But Market Shrugs
Jamie Dimon just fired off another warning shot. The JPMorgan (JPM) CEO said tariffs, geopolitical tension, and stagflation could knock markets off balance—yet investors barely blinked. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter Speaking at the bank's annual investor day, Dimon said the Trump administration's reduced tariffs are still 'pretty extreme' and called today's global risk environment 'very, very high.' He added that the chance of stagflation is 'a little bit higher' than most people think. Despite the warnings, JPMorgan stuck to its full-year net interest income forecast of about $94.5 billion. CFO Jeremy Barnum told investors that 'some headwinds have become tailwinds' and the bank is positioned to weather nearly any macro backdrop. JPMorgan Sticks with Guidance Despite Market Uncertainty The $3.9 trillion bank isn't rattled. Barnum noted JPMorgan's excess CET1 capital sits at $57 billion, enough to absorb recession risk. He said a moderate downturn would require a $3 billion reserve build. Anything worse could trigger 'even bigger builds.' Barnum also said JPMorgan has already booked a strong Q1, and the company is staying the course. 'Our core philosophy hasn't changed,' he told investors. Dimon Succession Plans Are Still a Question Mark Dimon, who turns 70 next year, gave no new clarity on succession plans. He said 'nothing's changed' from last year and it's 'up to the board.' JPMorgan's top contender remains consumer banking chief Marianne Lake, who also spoke at the event. Lake said the company had been expecting a soft landing 'until recently' but now sees the base case as somewhere between soft and mild recession. JPMorgan Pushes Forward with AI and Tech One big focus this year? Artificial intelligence. Barnum called JPMorgan 'an early mover in AI,' starting with fraud detection and now expanding into customer service and backend automation. 'We can't afford to fall behind,' he said. He added that the firm may be past 'peak modernization spend,' hinting at efficiency gains on the horizon. Is JPMorgan a Good Stock to Buy? According to TipRanks, JPMorgan Chase (JPM) is rated a Moderate Buy based on 19 analyst reviews. Out of those, 12 analysts call it a Buy, seven are sitting on Hold, and none are ringing the alarm with a Sell. The average 12-month JPM price target lands at $267.44, barely above water from the last close of $264.88 — a mere 0.97% implied upside. That signals Wall Street sees JPM more as a steady performer than a rocket ship. This muted upside reflects the mood around JPM's stability: dependable, battle-tested, and hard to bet against… but not exactly screaming 'growth stock' right now. See more JPM analyst ratings
Finextra
21-05-2025
- Business
- Finextra
Fewer than 1 in 4 banks ready for AI era
A vast majority of banks are unprepared for the advent of artificial intelligence, according to recently published research 0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. A report from Boston Consulting Group (BCG) found that almost all banks have invested in AI technology, yet less than 1 in 4 have progressed from pilots and proof of concepts to fully implement the technology into their daily operations. "The leap from predictive analytics to generative AI—and now to fully autonomous, agentic systems—is here," states the report. "AI is no longer a fringe experiment; it's the engine of next-generation banking. Customer interactions, loan approvals, fraud detection, even compliance monitoring: all are ripe for reinvention." Yet a recent BCG survey finds that only 25% of institutions have "woven these capabilities into their strategic playbook" states the report. "The other 75% remain stuck in siloed pilots and proofs of concept, risking irrelevance as digital-first competitors accelerate ahead. Most banks are deploying AI toward basic activities—not those that lead to transformation." According to BCG, banks must move beyond pilots to redefine strategy, technology and governance - or "risk losing control of the financial landscape to faster movers". "Early movers will set the pace—and the terms—of AI competition," states the report. "Lagging banks will find themselves racing to catch up under conditions they didn't choose." The publication of the report comes at an important time for AI in financial services on both sides of the Atlantic. The EU's AI Act came into force in August 2024. Meanwhile, the US largest bank, JP Morgan Chase, recently suggested it intends to ramp up its use of AI to increase efficiency while also calling for a slowdown in hiring. The bank's CFO, Jeremy Barnum, told investors at a meeting in New York that recruitment is set to slow following the appointment of 60,000 people over the last five years, equivalent to a 23% increase in head count. 'We're asking people to resist head count growth where possible and increase their focus on efficiency,' said Barnum, in comments reported by Business Insider.
Globe and Mail
20-05-2025
- Business
- Globe and Mail
JPM Investor Day Conference: Q2 IB Fees to Dip, 2025 NII May Rise by $1B
At the Investor Day conference yesterday, JPMorgan JPM CEO Jamie Dimon noted that the full impact of Trump's tariffs is yet to be fully understood, and even at the current levels (a baseline reciprocal tariff of 10% remains in place across the board), these remain steep. This is likely to hurt the economy, with a risk of higher inflation. On similar lines, Troy Rohrbaugh, co-CEO of the Commercial & Investment Bank (CIB) segment, noted that economic uncertainty is expected to hurt JPM's investment banking (IB) business this quarter, as deal-making activities have largely stalled. IB fees are expected to be down in the mid-teens range on a year-over-year basis. In the second quarter of 2024, IB fees in the CIB segment were $2.46 billion. On the other hand, JPMorgan's markets revenues are projected to grow in the mid-to-high single-digits range for the second quarter of 2025. This is likely to be driven by a significant rise in market volatility and higher client activity. Further, Chief Financial Officer Jeremy Barnum said, 'The evolving tariff environment, combined with the preexisting geopolitical tensions, adds significant uncertainty into the economic outlook.' Despite this, he believes the company's net interest income (NII) could increase by $1 billion this year, but stopped short of making the change in the NII outlook of $94.5 billion (up almost 2% year over year) as it's too early to comprehend the actual impact of various macroeconomic headwinds. Like JPM, its close peers – Bank of America BAC and Wells Fargo WFC – expect NII to grow this year. Bank of America anticipates NII to jump 6-7% year over year, while Wells Fargo expects the metric to be 1-3% higher than the 2024 level. Other Key Takeaways from JPMorgan's Conference JPMorgan reiterated its 2025 non-interest expense outlook of $95 billion. It emphasized the importance of artificial intelligence (AI) in boosting efficiency and noted that its technology budget is $18 billion this year, up roughly 6% from last year. Marianne Lake, CEO of the Consumer and Community Banking segment, said, 'The operations team (in consumer banking) is at the tip of the spear on using and leveraging new AI tools and capabilities. And based upon what we know today, we expect headcount will trend down by about 10% over the next five years or so.' Additionally, despite several near-term headwinds, JPMorgan affirmed its card net charge-off (NCO) rate at approximately 3.6%. Further, the company guided the 2026 card NCO rate to be between 3.6% and 3.9%. Further, Dimon stated that JPM will make Bitcoin ownership available to its clients, while having no plans to hold it in custody. Nonetheless, he noted that he's still 'not a fan' of Bitcoin, mainly because of its use for illegal activities. JPMorgan, with its massive liquidity, is open to expansion through acquisitions but remains "appropriately cautious" because of the challenges of integrating businesses. Since acquiring the assets of failed First Republic Bank in May 2023, the company has been relatively quiet on buyouts. JPM's Zacks Rank & Price Performance Over the past year, shares of JPMorgan have rallied 32.8%, outperforming the industry 's growth of 27%. At present, JPM carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report Wells Fargo & Company (WFC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis Report
Yahoo
20-05-2025
- Business
- Yahoo
JPMorgan Big Move: $18 Billion Tech Spend Signals AI Push for 2025
JPMorgan Chase (NYSE:JPM) said it plans to invest approximately $18 billion in technology next year, with a focus on AI to drive productivity and support volume growth, according to a Monday investor presentation. The bank reaffirmed its full-year 2025 guidance for total expenses of around $95 billion. It also maintained its net interest income forecast at roughly $90 billion, excluding Markets, and $94.5 billion on a firmwide basis. Chief Financial Officer Jeremy Barnum noted that while headcount has grown by about 4% annually over the past five years, the company sees room to increase operational efficiency. We continue to invest through the cycle, while simultaneously focusing on extracting efficiencies, Barnum said in the presentation slides. Despite the focus on trimming inefficiencies, JPMorgan said it remains committed to resourcing key areas such as bankers, advisors, and branches. The firm reported Q1 2025 credit reserves of $16.9 billion in its consumer division and $10.5 billion across wholesale operations. Its common equity tier 1 (CET1) capital stood at $280 billion, including $57 billion above regulatory requirements. Investor Day presentations began Monday morning and featured updates from all major business segments. This article first appeared on GuruFocus.
