Firing employees, settling legal disputes and centralizing back-office functions to preserve returns.
In their quest for higher profits, the biggest U.S. banks have seized on the one thing they can reliably control: cutting costs.
Bloomberg News reports that the nation’s six largest banks will spend $61.8bn on items including employee compensation, marketing and real estate in the fourth quarter, the lowest total for a quarter since the final three months 2008, according to analysts’ estimates.
That’s helping companies deliver more revenue to the bottom line, which at a projected $19.9bn for the group would be the most for the final quarter of a year since 2006.
Investors get a first glimpse when JPMorgan reports on January 14. Analysts expect the depth of cuts in the fourth quarter to highlight the firms’ success in trimming bloated operations by firing workers, settling legal disputes and centralizing back-office functions to preserve returns in the face of low interest rates that have sapped income. Now, banks are under pressure to find new sources of savings at a time when prospects for revenue growth remain uncertain.
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