JPMorgan’s investment bankers are to receive an average payout of US$369,651 after the bank set aside nearly US$10 billion to cover basic pay and bonuses.
The figures were released after JPMorgan Chase opened the US banking reporting season by reporting a 47 percent jump in profits for the last quarter of last year.
The US’ second-largest bank beat Wall Street forecasts, thanks to an improved performance from its retail banking and credit card operations. However, net profits at its investment banking arm fell during the quarter, partly because its bonus pot increased slightly.
Photo: AFP
JPMorgan said it had set aside US$9.73 billion as “compensation” for its investment bankers, up from US$9.33 billion in 2009. The average bonus fell slightly, though, to US$369,651 from US$379,986, as the number of employees rose to just over 26,300.
Chief executive Jamie Dimon said JPMorgan had set aside 35 percent of investment bank turnover for salary and bonuses, up from 33 percent of turnover a year ago.
The company’s investment banking arm increased revenues to US$6.213 billion during the last quarter, up from just under US$5 billion a year ago. But profits at the division fell to US$1.501 billion from US$1.901 billion, which it blamed on “higher non-interest expense” — including “increased performance-based compensation,” or bonuses.
Overall, the company made net earnings of US$4.8 billion for the final three months of last year, up 47 percent. For last year as a whole, JPMorgan posted a net income of US$17.4 billion on revenues of US$104.8 billion, close to 50 percent higher than a year ago. Its investment banking arm saw a 4 percent drop in profits for the full year to US$6.64 billion.
Dimon said the company had enjoyed a “solid” year, but admitted the ongoing crisis in the US housing market was causing problems.
“Credit trends in our credit card and wholesale businesses continued to improve. In our mortgage business, while charge-offs and delinquencies have improved, credit costs still remain at abnormally high levels and continue to be a significant drag on our returns,” Dimon said.
“Although we continue to face challenges, there are signs of stability and growth returning to both the global capital markets and the US economy,” he added.
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