REUTERS: JPMorgan Chase & Co on Tuesday largely maintained its key profit goals for the medium term, while the largest U.S. bank also raised its financial commitment for clean-energy initiatives, after years of pressure from environmental activists.
JPMorgan said it would spend US$200 billion to back clean energy projects, up from the US$175-billion target set in 2019.
The otherwise unchanged forecast on key profit goals was a sign that JPMorgan anticipates steady, but slower growth in 2020, according to an investor presentation posted online ahead of its annual investor day.
"We can outperform on a relative basis regardless of the environment," said Chief Financial Officer Jennifer Piepszak. "Our model is simply built to deal with these challenges."
The bank projected that return on tangible common equity (ROTCE), a key measure used to determine how well a bank is using its shareholders' money, will be the same as last year’s target of 17per cent. https://www.jpmorganchase.com/corporate/investor-relations/document/2020_firm_overview_ba56d0e8.pdf
However, JPMorgan cut its outlook for net interest income to US$57 billion for 2020, down from US$57.8 billion in 2019 due to lower interest rates.
The slide presentation showed that JPMorgan's outlook remained unchanged for profit at its Corporate & Investment Bank (CIB). It expects return on equity of 16per cent, unchanged from the target that was set a year ago. The investment bank provided one-third of JPMorgan's revenue in 2019.
Analysts had thought JPMorgan could push for higher growth at the Corporate & Investment bank. The CIB division's return on equity has declined 6per cent over the last decade to 15per cent in 2019, largely because of higher regulatory capital requirements.
Targeted return on equity stayed unchanged at 25per cent-plus for the Consumer & Community Banking segment, and remained flat at 18per cent for the Commercial Banking segment.
JPMorgan also maintained the outlook for the Asset & Wealth Management business and said it expected a 25per cent-plus return on equity in the medium term.
(Reporting by Anirban Sen in Bangalore and Elizabeth Dilts in New York; Editing by Bernard Orr)