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JPMorgan (JPM) Lifts '24 NII View, Discusses Succession Plan
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The expectation of fewer interest rate cuts seems to be a boon for JPMorgan (JPM - Free Report) . The company now projects net interest income (NII) for 2024 to be nearly $92 billion, up from the prior target of approximately $90 billion. Other than lesser rate cuts, "better-than-expected reprice and migration performance” also drove the NII guidance.
JPMorgan announced this and a few other updated/new targets at the Investor Day conference yesterday. The top management also discussed the succession plan and the role of AI in the current environment.
In contrast, other major regional banks, including Wells Fargo (WFC - Free Report) and Citigroup (C - Free Report) , anticipate NII to decline this year. WFC expects the metric to fall in the range of 7-9% from the 2023 reported figure of $52.4 billion. Likewise, C projects NII (excluding Markets NII) to be down modestly in 2024.
Apart from NII, JPM now expects adjusted non-interest expenses to be almost $92 billion, an increase of $1 billion from the prior guidance. The company also lifted its technology budget for this year. It plans to spend roughly $17 billion on technology, up 9.6% year over year.
The top executives, as well as the CEO Jamie Dimon, discussed the potential that AI represented for the company. Dimon stated, “I think it's gonna change every job, like, every job.”
Additionally, Daniel Pinto, JPM’s chief operating officer, noted that $1-$1.5 billion has been assigned to AI use cases that have been identified in the areas of customer service, trade and operational efficiencies and fraud management.
Further, despite using AI and other tech upgrades, JPMorgan remains on track to increase its brick-and-mortar footprint. Last year, the company, which already has a presence in all 48 states in the United States, announced plans to open more than 500 new branches by 2027. The company also is committed to renovating 1,700 existing locations by 2027-end to serve its customers better.
Another important topic of discussion was Dimon’s future plans. For the past few years, he has been dodging questions related to his plans to retire, with statements like he is going to stay in the job for another five years. But this time, Dimon said, “not five years anymore.”
Being one of the longest-serving CEOs of a major global bank, this statement drew investors’ attention, and the company shares closed 4.5% lower. JPMorgan recently made several changes at the top level, and there are a few potential contenders who could step in once Dimon plans to retire.
Under Dimon, JPM has successfully navigated the 2008 financial crisis and the recent regional banking crisis. Since Jan 1, 2006, when he became the CEO, the company’s shares have skyrocketed 392.7%. In comparison, the industry and the S&P 500 index have surged 27.4% and 355.6%, respectively.
Image: Bigstock
JPMorgan (JPM) Lifts '24 NII View, Discusses Succession Plan
The expectation of fewer interest rate cuts seems to be a boon for JPMorgan (JPM - Free Report) . The company now projects net interest income (NII) for 2024 to be nearly $92 billion, up from the prior target of approximately $90 billion. Other than lesser rate cuts, "better-than-expected reprice and migration performance” also drove the NII guidance.
JPMorgan announced this and a few other updated/new targets at the Investor Day conference yesterday. The top management also discussed the succession plan and the role of AI in the current environment.
In contrast, other major regional banks, including Wells Fargo (WFC - Free Report) and Citigroup (C - Free Report) , anticipate NII to decline this year. WFC expects the metric to fall in the range of 7-9% from the 2023 reported figure of $52.4 billion. Likewise, C projects NII (excluding Markets NII) to be down modestly in 2024.
Apart from NII, JPM now expects adjusted non-interest expenses to be almost $92 billion, an increase of $1 billion from the prior guidance. The company also lifted its technology budget for this year. It plans to spend roughly $17 billion on technology, up 9.6% year over year.
The top executives, as well as the CEO Jamie Dimon, discussed the potential that AI represented for the company. Dimon stated, “I think it's gonna change every job, like, every job.”
Additionally, Daniel Pinto, JPM’s chief operating officer, noted that $1-$1.5 billion has been assigned to AI use cases that have been identified in the areas of customer service, trade and operational efficiencies and fraud management.
Further, despite using AI and other tech upgrades, JPMorgan remains on track to increase its brick-and-mortar footprint. Last year, the company, which already has a presence in all 48 states in the United States, announced plans to open more than 500 new branches by 2027. The company also is committed to renovating 1,700 existing locations by 2027-end to serve its customers better.
Another important topic of discussion was Dimon’s future plans. For the past few years, he has been dodging questions related to his plans to retire, with statements like he is going to stay in the job for another five years. But this time, Dimon said, “not five years anymore.”
Being one of the longest-serving CEOs of a major global bank, this statement drew investors’ attention, and the company shares closed 4.5% lower. JPMorgan recently made several changes at the top level, and there are a few potential contenders who could step in once Dimon plans to retire.
Under Dimon, JPM has successfully navigated the 2008 financial crisis and the recent regional banking crisis. Since Jan 1, 2006, when he became the CEO, the company’s shares have skyrocketed 392.7%. In comparison, the industry and the S&P 500 index have surged 27.4% and 355.6%, respectively.
Image Source: Zacks Investment Research
At present, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.