Latest news with #TroyRohrbaugh
Zawya
26-05-2025
- Business
- Zawya
JP Morgan sees trade war hurting Q2: IFR
JP Morgan is expecting volatility from the trade war unleased in April to drag down investment banking revenues in the second quarter but to boost trading. Investment banking fees in the April–June quarter are on track to be down 'mid-teens [percent] – plus or minus' compared with a year earlier, depending on how the remainder of the quarter plays out, said Troy Rohrbaugh, co-CEO for the commercial and investment bank. That's a very different outcome than most expected coming into 2025, when investors and bankers foresaw investment banking fees surging throughout the year. 'Clients entered the year very bullish, expecting a pro-growth, pro-business, deregulatory environment, maybe some more big M&A,' said CIB co-CEO Doug Petno, also speaking at the bank's annual investor day. 'When they started to see some flashing yellows, flagging red signs, and a slowdown in the economy, many tapped the brake." Petno added: 'And then with the events of April, everybody put everything on hold. The typical client's got their foot on the brake at the moment.' He said almost every input variable in capital budget or valuing a company, interest rates, discount rates, currencies and taxes had yet to be determined. 'All those puzzle pieces have to come together,' Petno said. So, the typical client is taking a wait-and-see attitude. And while US president Donald Trump's tariff policy may have ratcheted up uncertainty, tariffs were only one part of it, he said. The US Federal Reserve as well as other central banks had been trying to engineer a soft landing for the last couple of years. A bigger part of the uncertainty was what kind of landing there would be in the US and globally, Petno said. The uncertainty that has cast a pall over investment banking is boosting trading revenues, however. Trading markets have been performing at peak levels for years now and rather than reverting to pre-Covid levels, Rohrbaugh expects current levels may be the new normal. He said the bank's markets group had a strong start to the quarter, but trading has cooled as volatility has moderated. JP Morgan's trading revenue should be up 'in the mid- to high single digits' percent year-on-year, Rohrbaugh said. 'Keep in mind for both markets and investment banking, we're operating in a very uncertain market, which makes forecasting difficult,' he said. Deutsche too Deutsche Bank offered a similar view. Chief executive Christian Sewing told shareholders at its annual general meeting on Thursday that clients were still 'holding back' on mergers and acquisitions and IPOs 'given the current uncertainty', but the bank had done well during early April's market turmoil. "The second quarter started with a jolt. We have come through this phase of sometimes extreme volatility well, although it remains to be seen how the tariff threat and market events will affect client behaviour,' Sewing said. Sewing and JP Morgan CEO Jamie Dimon also both flagged that European banks could benefit from the fallout from the tariff and trade war. Dimon said JP Morgan lost business as non-US clients took a nationalistic stance. 'Not that the clients were mad at us,' he said, but in some cases where there was a choice to use a national bank, some clients made that choice. Dimon did not name names but suggested those clients were on both sides of the Atlantic, in Canada and Europe. 'I do expect there'll be some of that if this trade war gets worse,' he said. 'But it's not going to change our plans.' Sewing said the US policy uncertainty could prove beneficial to Europe in the long run. 'The United States is putting both Europe's established security framework and the idea of free trade into question. More than ever Europe is needed as an engine for free trade,' he said. "The demand for a European alternative to US banks is growing,' Sewing said, calling 2025 'a year of reckoning' for the bank. Four more years Dimon said he expects to retire within four years. A year ago, he said the timetable for his retirement was less than five years. For years previously, he had said he would stay in the CEO role 'five more years.' Dimon, 69, has been CEO of JP Morgan for 19 years. 'Obviously it's up to the board,' he said. 'If I'm here for four more years or two or three, that's a long time." Dimon said the most important thing is that once he does step down, the strong teams he has in place across the sprawling bank will continue building on his success, regardless of who the new CEO is.
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
Bloomberg
19-05-2025
- Business
- Bloomberg
JPMorgan Sees Investment-Banking Fees Falling in Mid-Teens Range
JPMorgan Chase & Co. 's second-quarter investment-banking fees could decline by more than analysts are expecting as volatility set off by President Donald Trump's policy announcements continues to chill deals. Troy Rohrbaugh, co-CEO at JPMorgan's commercial and investment bank, said it expects investment banking fees to fall by a percentage in the mid-teens compared to a year ago — more than analysts had predicted.
