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Finextra
25-05-2025
- Business
- Finextra
Deep Dive: How JPMorgan Is Reengineering Banking at Scale: By Sam Boboev
In a global financial landscape defined by volatility and uncertainty, JPMorgan Chase is aggressively evolving to stay on top. Speaking at the bank's 2025 Investor Day, CEO Jamie Dimon cautioned that 'geopolitical risk is very, very, very high' – higher than many market participants may assume – and warned that a worst-case stagflation scenario is 'probably two times' more likely than commonly thought. Persistent inflation, rising interest rates, and conflict-driven geopolitical tensions all form a turbulent backdrop. Yet JPMorgan's leadership exuded confidence that the firm can thrive through turbulence. Management stressed the strength of the bank's guiding principles – a 'fortress' balance sheet, disciplined risk management, and long-term focus – as the foundation for navigating 'a range of economic scenarios'. In Dimon's words, even if conditions deteriorate sharply, 'we will be fine'. The firm is doubling down on customer-centric innovation while fiercely maintaining its traditional strengths in capital and control. Executives detailed how JPMorgan is leveraging its scale and diverse franchises to deliver growth through-the-cycle, harnessing new technologies like AI to drive efficiency and client experience, and engaging constructively – and at times contentiously – with an evolving regulatory regime. The message is clear: in today's unpredictable environment, JPMorgan intends not just to preserve its leading position, but to extend its competitive edge. What follows is an in-depth look at the bank's strategic context, business performance, product and platform development, technology investments, regulatory stance, capital strategy, and financial outlook as presented in May 2025. Strategic Context and Philosophy 'Consistency is part of the strategy,' declared CFO Jeremy Barnum as he opened the day. Despite rapid changes in fintech and finance, JPMorgan is sticking to core principles that have served it well. Barnum reiterated the bank's 'proven operating model' and 'consistent strategic framework', built on exceptional client franchises and unwavering principles.v These principles include focusing on customers, investing continuously in the future (even while keeping an eye on expenses), and never compromising on safety and soundness. JPMorgan aims to be 'customer-centric and easy to do business with,' offering a comprehensive set of products while safeguarding clients with a robust risk culture and strong controls. In short, the firm strives to be everything a customer or corporate might need – from payments to wealth advice – under one trusted roof, supported by a fortress balance sheet and a reputation for reliability. Crucially, JPMorgan's philosophy emphasizes long-term value over short-term maximization. Barnum noted that all else equal, higher returns are nice, 'but all else is not equal'. If JPM simply chased the highest immediate ROE, 'we will become a tiny company and keep only the highest returning businesses, while returning the rest of the capital to shareholders', he explained – and 'I think it's safe to say that you wouldn't want us to do that.' Instead, JPMorgan explicitly balances profitability with scale and client needs: 'there is a fundamental tension between maximizing ROE and maximizing shareholder value, and we are in the business of maximizing long-term shareholder value'. In practice, this means the bank is willing to deploy capital in businesses that earn below the headline 17% return target – as long as those ventures exceed the cost of equity and strengthen JPMorgan's client franchise. Management urged investors to view the firm's 17% Return on Tangible Common Equity (ROTCE) target as an outcome, not a constraint. This patient, through-cycle mindset – essentially trading off peak short-term ROE in favor of sustainable growth and market leadership – is a defining element of JPMorgan's corporate ethos. Even as it hews to timeless principles, JPMorgan is constantly scanning the landscape and adapting its strategy. The leadership acknowledges formidable competitive threats 'coming at us a lot of different ways,' as Dimon put it. Fintech upstarts, big tech firms moving into payments, and changing customer expectations all require JPMorgan to innovate relentlessly. Executives spoke of an 'emerging technologies and evolving client expectations' environment and the need to 'self-disrupt' before others do. The firm's strategy, therefore, marries its scale advantages and strong risk culture ('complex markets play to our strengths') with a proactive investment agenda. From retail banking to the corporate bank, JPMorgan is reinvesting heavily in technology, talent, and new ideas to extend its competitive advantages. As we'll see, this has meant everything from hiring hundreds of senior bankers in growth areas to modernizing customer journeys with AI. The overarching philosophy: never become complacent, even as a market leader. 'We know the competition is coming… We assume we're going to win', said one executive, but that assumption is backed by deliberate strategy and continual reinvestment. -------------- Disclaimer: Fintech Wrap Up aggregates publicly available information for informational purposes only. Portions of the content may be reproduced verbatim from the original source, and full credit is provided with a 'Source: [Name]' attribution. All copyrights and trademarks remain the property of their respective owners. Fintech Wrap Up does not guarantee the accuracy, completeness, or reliability of the aggregated content; these are the responsibility of the original source providers. Links to the original sources may not always be included. For questions or concerns, please contact us at
Independent Singapore
23-05-2025
- Business
- Independent Singapore
Singtel launches first share buyback programme of up to S$2B after fivefold rise in net profit
Justin Ng/Flickr SINGAPORE: Singtel has launched its first share buyback programme of up to S$2 billion, shortly after posting a fivefold increase in net profit to S$4.02 billion for FY 2025, Singapore Business Review reported. The group said the programme is part of its active capital management strategy to drive sustained growth and value for shareholders. 'Funding for the share buybacks will be underpinned by excess capital from the Group's asset recycling proceeds,' the group stated in a press release on Thursday (May 22). In May last year, the group set a mid-term asset recycling target of S$6 billion as part of its Singtel28 growth plan, which it is now raising to S$9 billion. Singtel's value realisation share buyback is its latest capital management initiative after it updated its dividend policy in May last year to include a value realisation dividend on top of its core dividend to return excess capital to shareholders. Its share buyback programme will be administered per Singtel's Share Purchase Mandate, allowing the group to buy back up to 5% of its total issued shares, excluding treasury shares and subsidiary holdings, with approval from shareholders at each annual general meeting. Singtel Group CFO Arthur Lang said, 'Building on the Group's proven track record in asset recycling, and the opportunities we are seeing, we are increasing our medium-term capital recycling target to S$9 billion to further fund business growth and return excess capital to our shareholders.' /TISG Read also: SIA staff to receive 7.45-month bonus for FY2025 after record net profit of S$2.78B
Yahoo
22-05-2025
- Business
- Yahoo
Why Sembcorp Industries Ltd (SGX:U96) Looks Like A Quality Company
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. To keep the lesson grounded in practicality, we'll use ROE to better understand Sembcorp Industries Ltd (SGX:U96). Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Sembcorp Industries is: 18% = S$1.0b ÷ S$5.7b (Based on the trailing twelve months to December 2024). The 'return' is the amount earned after tax over the last twelve months. That means that for every SGD1 worth of shareholders' equity, the company generated SGD0.18 in profit. Check out our latest analysis for Sembcorp Industries By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As is clear from the image below, Sembcorp Industries has a better ROE than the average (7.6%) in the Integrated Utilities industry. That is a good sign. However, bear in mind that a high ROE doesn't necessarily indicate efficient profit generation. Especially when a firm uses high levels of debt to finance its debt which may boost its ROE but the high leverage puts the company at risk. Our risks dashboardshould have the 2 risks we have identified for Sembcorp Industries. Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. That will make the ROE look better than if no debt was used. Sembcorp Industries clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.53. While its ROE is respectable, it is worth keeping in mind that there is usually a limit as to how much debt a company can use. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it. Return on equity is useful for comparing the quality of different businesses. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking this free report on analyst forecasts for the company. If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. 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
