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JPMorgan Chase is planning an “unmatched” spending spree this year of $15.7bn — $2bn more than the bank spent last year — on new initiatives including hiring, marketing and investment in technology.
“Our competitors have not and cannot invest at the levels that we do,” said Marianne Lake, who is co-head of the bank’s consumer and community division and is seen as a possible successor to chief Jamie Dimon. Her business unit is expected to spend $7.9bn on new investments, an increase of $800mn from 2022.
In a sign of the increasing bifurcation between bigger US banks and smaller lenders that have come under pressure this year, JPMorgan at its investor day yesterday lifted its outlook for how much it expected to earn this year from its lending business following the recent purchase of First Republic.
The bank raised its 2023 target for net interest income, excluding its trading division, to about $84bn from $81bn previously because of its deal for First Republic.
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More US banks: First Citizens, Silicon Valley Bank’s new owner, is suing HSBC and several former employees for more than $1bn, claiming the group “engineered a scheme to plunder” SVB of top bankers and confidential information.
Here’s what I’m watching today:
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EU meeting: The Foreign Affairs Council’s defence ministers discuss support for Ukraine and hold an informal exchange with Nato secretary-general Jens Stoltenberg.
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Economic data: The UK publishes public sector borrowing figures for April, while S&P Global releases flash purchasing managers’ indices for France, Germany, the UK, US and the eurozone.
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International Booker: The winner of the book prize is announced in London.
Who will win the US-China tech war? Join FT and Nikkei Asia journalists for a subscriber-exclusive webinar this Thursday and put your questions to the panel.
Five more top stories
1. Exclusive: New climate-friendly biofuels will “never achieve the price of jet fuel”, Boeing chief Dave Calhoun has warned, pouring cold water on a central pillar of the aviation sector’s strategy to slash emissions. Sustainable fuels currently account for less than 1 per cent of global aviation consumption and cost twice as much as traditional jet fuel.
2. Joe Biden and Kevin McCarthy failed to reach a deal to avoid a default on US debt yesterday evening at the White House. But talks between the president and Republican House leader were set to continue, suggesting an agreement could be within reach.
3. Labour is willing to force pension plans to invest in a proposed £50bn “future growth fund” to boost capital available to fast-growing British companies, said Rachel Reeves, but she did not believe her party would need to do so because of goodwill in the sector. Read the shadow chancellor’s full interview with the FT.
4. Exclusive: TikTok has restructured its ecommerce business to refocus on certain markets. Staff in Brazil who were working on launching TikTok Shop there are being relocated to markets where the service has already been introduced. Read more on the ByteDance-owned platform’s plans.
5. Large asset management groups are piling back into fixed income after a “cataclysmic” period of performance for bonds last year, with one chief executive expecting $1tn to flow into debt markets in the next few years. Here’s why “bonds are exciting again”.
The Big Read
US Congress members who buy or sell a stock are required to report the transaction within 45 days. But these individual transaction reports leave out the vast majority of lawmakers’ investment portfolios because purchases of collective investment funds only need to be revealed once a year in complex and harder-to-access reports. Here’s how Capitol Hill is struggling to keep up with new insider trading risks.
We’re also reading . . .
Chart of the day
British households are among the most gloomy about inflation levels and their own disposable income, according to an Ipsos Mori survey of 29 countries.
Take a break from the news
Last year, Salman Rushdie was repeatedly stabbed onstage at a literary festival in upstate New York, an attack which robbed him of his right eye. In one of his first public appearances since then, the 75-year-old novelist told the FT Weekend Festival on Saturday that he was planning to write a book about the attempt on his life.
Additional contributions by Gordon Smith and Amanda Chu
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