On Second Thought, Jamie Dimon Pretty OK With Tax Reform

Also, have you met Marianne Lake?
By World Economic Forum (Flickr: The Global Financial Context: James Dimon) [CC BY-SA 2.0], via Wikimedia Commons

By World Economic Forum (Flickr: The Global Financial Context: James Dimon) [CC BY-SA 2.0], via Wikimedia Commons

Most Wall Street banks threw themselves a party while President Trump’s child-scrawl was still wet on the unread-by-lawmakers-but-apparently-not-by-banks tax reform. Citi took the happiest $22 billion charge in financial history. Brian Moynihan enjoyed a rare opportunity to smile. But Jamie Dimon had a somewhat more subdued reaction.

On the bright side for him and for JPMC shareholders, the melancholy cleared quickly.

JPMorgan moved its medium-term target—over the next two to three years—for return on tangible common equity, a key profitability metric, to roughly 17% compared with its prior target of 15%.... Excluding tax reform, the bank said its return on tangible common equity target over the next two to three years would be around 15%....

Already, the bank’s traders are off to a strong start this year. Daniel Pinto, the bank’s co-president and head of its corporate and investment bank, said trading is expected to rise “mid to high single digits” in the first quarter of 2018—based on strong performance in foreign exchange, emerging markets and equities—compared with the same period last year. He added that activity in the beginning of 2018 has been “strong” and that “markets are correcting quite fast after the selloff” earlier this year.

Which is nice for Pinto, who got to enjoy his moment in the sun. But this investor day belonged to the heiress apparent.

Finance Chief Marianne Lake, who spearheaded the presentation for the first time, said each of the bank’s main businesses—consumer banking, corporate and investment banking, commercial banking and wealth and asset management—has increased medium-term targets “reflecting tax reform but also reflecting growth….”

Ms. Lake said she’s hopeful about “more constructive regulatory backdrop” and added that the bank’s “investing capabilities are limited only by the opportunities in front of us and our ability to execute against them.”

JPMorgan Says Tax Changes Will Lead to Higher Profitability [WSJ]