JPMorgan Chase & Co. Chief Financial Officer Marianne Lake said the $27 billion profit outlook the bank laid out at an investor conference last month wasn’t a target and the firm can earn more than that.
“That’s not a forecast, that’s not a budget, it’s a simulation, and it was really predicated only on those things that we’re really certain of,” Lake said today in a Bloomberg Television interview with Stephanie Ruhle and Erik Schatzker. “I think there’s every reason to believe that it’s biased to the conservative.”
The $27 billion outlook compares with net income of $17.9 billion last year and $21.3 billion in 2012. At the firm’s investor day in 2013, JPMorgan presented a scenario in which earnings could increase to $27.5 billion, while saying its target was $24 billion.
This year’s outlook only factored in the impact of higher interest rates and investments the firm has made in its business over the past few years, Lake said. It didn’t include higher trading revenue, even as the bank “absolutely expects” that business to grow over the next five years, she said.
Lake also said that rising costs from regulation will be “somewhat permanent.” Still, JPMorgan holds the “best hand” among large banks and will continue to outperform rivals, according to Lake. She declined to forecast the maximum the bank could earn in the next few years.