JPMorgan Raises Forecast for Investment Bank ROE to About 14%

  • Higher net interest income, lower legal costs projected
  • Bank predicts at least $30 billion in annual net income

JPMorgan Investor Day Addresses Card, Loan Issues

JPMorgan Chase & Co. raised the forecast for return-on-equity in its investment bank to about 14 percent from 13 percent last year.

Higher net interest income and lower legal costs contributed to the improved view for 2017, according to a presentation Tuesday on the New York-based company’s website. The firm said first-quarter trading revenue would be “modestly” higher compared with a year ago.

JPMorgan, which released the new forecasts as part of its annual Investor Day, could benefit from the Trump administration’s pledge to relax bank regulations and implement corporate tax cuts. Interest income is rising after two Federal Reserve interest-rate increases since the end of 2015, and futures prices show expectations are rising for another boost in March.

The company, the biggest U.S. bank by assets, also said it expects at least $30 billion in annual net income. The consumer bank ROE forecast remained unchanged at 20 percent.

JPMorgan shares slid 0.9 percent to $89.65 in early trading at 8:19 a.m. in New York. The stock has gained 29 percent since the U.S. election in November, compared with the 28 percent advance for the 24-company KBW Bank Index.

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