JPMorgan, the world’s biggest investment bank, lowered its target for returns at that business and plans to cut $2.8bn in costs because higher capital requirements are crimping profit.
Bloomberg News reports that the unit, led by Daniel Pinto, reduced its forecast for return on equity at the corporate and investment bank to 13% from 15%, according to a presentation on the company’s website earlier this week. The division expects to have a common equity Tier 1 capital ratio of 12.5%, up from 10.5%.
On a more positive note, Bloomberg also reports that JPMorgan’s corporate and investment bank probably will post higher trading revenue in the first quarter from a year earlier, according to Pinto.
This year is off to a 'very strong' start, Pinto, 52, said Tuesday in a presentation to investors, without elaborating on the size of the increase. The division posted $5.06bn of trading revenue in last year’s first quarter.