At JPMorgan, Profits Climb, Revenue Falls, and Dimon’s Odds Go Sideways

The bank's 33 percent rise in profit comes largely from cost-cutting, as Dimon fights to keep his title as chairman.
Jamie Dimon, CEO of JPMorgan Chase, arrives at an investors meeting at company headquarters in New York Photograph by Victor J. Blue/Bloomberg

Jamie Dimon’s fight to keep both of the titles on his business card is still too close to call. The chairman and chief executive officer of JPMorgan Chase announced first-quarter earnings of $6.53 billion this morning, up 33 percent from the previous year—figures that might or might not placate shareholders still irritated by the ongoing fallout from the bank’s “London Whale” trading fiasco almost a year ago.

Revenue for the quarter actually fell 4 percent, from $26 billion to $25 billion. The rise in profits came largely from cost-cutting, notably $2.4 billion taken away from the pile of money the bank sets aside for legal costs. Shares of JPMorgan traded slightly down when the market opened, then rebounded.

Dimon, once considered the undisputed best risk manager on Wall Street, is still struggling with the reputational repercussions of last year’s $6.2 billion episode. The “Whale,” he has declared, “has been harpooned, beached, eviscerated, cremated, and killed,” but a Senate report issued in March helped keep the issue alive by condemning Dimon’s oversight. In January the bank halved his pay, to $11.5 million. JPMorgan shareholders are now voting on whether he should give up his chairmanship, ahead of the bank’s annual meeting in May.

On a conference call this morning, Dimon declined to answer questions about whether he will, or should, be forced to relinquish the role. “It’s not up to me,” he said. The shareholder vote is nonbinding, but if it succeeds, it will exert pressure on the board to act.

Goldman Sachs chairman and CEO Lloyd Blankfein dodged a similar effort two days ago, when his bank reached a deal with an investor group that had been agitating for change. Blankfein will keep both jobs, but Goldman’s lead independent director, James Schiro, will assume additional responsibilities.

With the new earnings data, JPMorgan investors now have all the financial results they’re going to get before casting their ballots.

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