Something for everyone

27 February 2018 By John Foley Follow @johnsfoley

The bank hiked its main return target to factor in last year’s tax cuts. While some benefits may get competed away, for now shareholders get the lion’s share. Investing in the community is well and good, but so too is payback after years of absorbing higher costs.

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JPMorgan increased its main financial-return target on Feb. 27 as a result of changes to the U.S. tax regime.

Hosting the lender’s investor day, Chief Financial Officer Marianne Lake said that JPMorgan expects a favorable tax regime to add up to 3 percentage points to its return on tangible common equity.

The overall target for the medium term was set at 17 percent, compared with a 15 percent target outlined a year earlier. Its return for 2017 was 12 percent.

Lake said that over time, some of the benefits might get passed on to customers through competition, but added that “time is an important dimension.”

The bank forecast improvements in return on equity across all four of its businesses – consumer banking, asset and wealth management, corporate and investment banking and commercial banking.

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