JPMor­gan chief raps D.C. grid­lock

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - KEN SWEET

NEW YORK — Af­ter JPMor­gan Chase posted a record $7 bil­lion quar­terly profit, the last thing a con­tentious Jamie Di­mon wanted to talk about Fri­day were his com­pany’s earn­ings.

In­stead, the chief ex­ec­u­tive of­fi­cer of the na­tion’s largest bank vented his ir­ri­ta­tion with politi­cians and what he called grid­lock that’s pre­vent­ing the econ­omy from do­ing even bet­ter.

Di­mon, a mem­ber of Pres­i­dent Don­ald Trump’s busi­ness ad­vi­sory coun­cil, has a rep­u­ta­tion for speak­ing with lit­tle to no fil­ter. He’s com­plained in the past that U.S. gov­ern­ment pol­i­cy­mak­ers spend too much time ar­gu­ing rather than im­prov­ing the econ­omy.

The U. S. econ­omy has been ex­pand­ing at less than 2 per­cent a year since the re­ces­sion, which is be­low the typ­i­cal growth af­ter an eco­nomic down­turn, his­tor­i­cally. Di­mon said growth would be higher if Washington grid­lock would ease.

As head of the na­tion’s big­gest bank, Di­mon has a big stake in how Washington op­er­ates and how the U.S. econ­omy per­forms. And while Trump’s busi­ness ad­vi­sory coun­cil can­not make pol­icy de­ci­sions, it does have in­put on what the White House’s pri­or­i­ties should be for big com­pa­nies such as JPMor­gan.

Repub­li­cans who con­trol of both houses of Congress and the White House have pro­posed cut­ting cor­po­rate in­come taxes, which would di­rectly ben­e­fit JPMor­gan’s bot­tom line, and in­fras­truc­ture spend­ing would add to

U.S. gross do­mes­tic prod­uct. There is also talk about trim­ming back some of the strict reg­u­la­tions put in place af­ter the fi­nan­cial cri­sis that bank CEOs such as Di­mon have ar­gued are re­strict­ing the abil­ity of banks to lend money.

Asked by a busi­ness jour­nal­ist a rou­tine ques­tion about the firm’s bond trad­ing re­sults af­ter the Fed­eral Re­serve’s in­ter­est rate in­crease last month, Di­mon called for re­porters to fo­cus less on the quar­ter-to­quar­ter changes in its busi­ness and more on big­ger is­sues like in­fras­truc­ture, the opi­oid epi­demic, tax­a­tion and jobs.

“[ Re­porters] should be writ­ing a lot more about the stuff that is hold­ing back and hurt­ing av­er­age Amer­i­cans. Who re­ally cares about fixed­in­come trad­ing in the last two weeks of June, I mean se­ri­ously?” he said.

While the bank over­all has ben­e­fited from the Fed’s de­ci­sion and has been mak­ing more loans across all its busi­nesses, this quar­ter’s quiet stock and bond mar­kets de­pressed the bank’s trad­ing rev­enue by 17 per­cent. Fixed­in­come trad­ing rev­enue was down 19 per­cent from last year, while stock trad­ing was mostly flat.

Even so, the bank re­ported a profit of $7.03 bil­lion, or $1.82 per share, an im­prove­ment from a profit $6.20 bil­lion, or $1.55 a share, a year ago. The re­sults beat an­a­lysts’ ex­pec­ta­tions.

JPMor­gan’s in­vest­ment and cor­po­rate bank­ing divi­sion earned $2.71 bil­lion com­pared with $2.49 bil­lion a year ear­lier, and saw a 17 per­cent rise in in­vest­ment bank­ing fees.

Cit­i­group and Wells Fargo also re­ported their quar­terly re­sults Fri­day. All three re­ported a rise in in­ter­est in­come and were gen­er­ally lend­ing more across all their busi­nesses.

Cit­i­group also re­ported a de­cline in trad­ing this quar­ter, al­beit not as big as JPMor­gan. Typ­i­cally less-volatile mar­kets re­sult in lower trad­ing rev­enue for the ma­jor banks, as its traders can­not take ad­van­tage of heavy trad­ing and big­ger swings in stock and bond prices.

One area of con­cern, par­tic­u­larly for JPMor­gan, is bad loans in its credit card busi­ness. The bank set aside more money this quar­ter to cover bad loans, mostly in its credit card divi­sion. JPMor­gan ex­ec­u­tives have said the bank is start­ing to of­fer and ap­prove ap­pli­ca­tions for credit cards to higher-risk bor­row­ers that it pre­vi­ously would have re­jected.

De­spite the money des­ig­nated to ad­dress bad loans, Di­mon said: “the U.S. con­sumer re­mains healthy.”

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