Revenue at JP Morgan Chase’s investment bank could fall as much as 50% in the third quarter of 2022, one of the Wall Street bank’s top executives has warned.
The bank’s president and chief operating officer, Daniel Pinto, said he expects JP Morgan’s investment banking fees to be 45-50% lower than the $3.3 billion it made in the third quarter of last year, according to the Financial Times.
The forecast comes as bank fees have already fallen by 44% in the first six months of 2022, following a record year for transactions in 2021.
The crisis raises the prospect of layoffs at America’s largest bank by assets, as Wall Street grapples with the potential for a major economic downturn.
Goldman Sachs confirmed yesterday that it will start cutting jobs again this month, following the bank’s decision to suspend its annual showdown for the past two years.
Asked if JP Morgan would follow suit, Pinto told the Barclays Global Financial Services Conference in New York that the bank will “adapt over time to whatever we think is a medium-term structure. necessary”.
He noted that the bank could “adjust” compensation, instead of letting people go, as he suggested “you have to be careful when you have a bit of a downturn…because you hurt the ability to growth in the future”.
Pinto noted that JP Morgan’s trading business took advantage of market volatility, to see its revenue rise 5% year-over-year.
JP Morgan is expected to release its third quarter results on October 14.