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JPMorgan raises clean energy spending goals, profit targets unchanged

The new target, however, failed to satisfy some climate-change activists who flocked outside JPMorgan’s New York headquarters, partially blocking some entrances and demanding that the bank get rid of fossil-fuel clients.

At the investor meet, Chief Financial Officer Jennifer Piepszak said she was confident that the bank’s near to medium-term growth would be backed by a robust U.S. economy, despite some near-term headwinds.

“We can outperform on a relative basis regardless of the environment,” Piepszak said. “Although risks are more skewed to the down side given … risks like coronavirus, we are confident that the strength of our operating model will continue to demonstrate strength.”

The bank projected that return on tangible common equity (ROTCE), a key measure used to determine how well a bank is using its shareholders’ money, will be the same as last year’s target of 17%.
However, JPMorgan cut its outlook for net interest income (NII) to $57 billion for 2020 from $57.8 billion in 2019, blaming lower interest rates.

The bank forecast NII of $60 billion or more for 2021, which was above analysts’ estimates.

The bank also forecast higher expenses of $67 billion, compared with $65.3 billion last year, despite a “reduction in structural expenses.”
The presentation showed that JPMorgan’s outlook remained unchanged for profit at its corporate & investment bank (CIB), a disappointment for analysts who had expected the lender to push for higher growth at the unit that accounted for a third of total revenue in 2019.

It expects return on equity of 16%, unchanged from the target that was set a year ago.
Targeted return on equity stayed unchanged at 25%-plus for the consumer & community banking segment, and remained flat at 18% for the commercial banking segment.

JPMorgan also maintained the outlook for the asset and wealth management business and said it expected a 25%-plus return on equity in the medium term.
 

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