Bonuses cut at JP Morgan as deals dry up: Investment bankers facing cuts of up to 30%
Investment bankers at JPMorgan are facing bonus cuts of up to 30 per cent after a slump in deal making took a chunk out of earnings on Wall Street.
Firms have been battening down the hatches as recession looms, depriving top New York banks of lucrative fee income.
JPMorgan was among those counting the cost yesterday as it revealed a 57 per cent fall in investment banking revenues in the fourth quarter to £1.1billion.
Sign of the times: Investment bankers at JPMorgan are facing bonus cuts of up to 30 per cent after a slump in deal making took a chunk out of earnings on Wall Street
It was a similar story at Citigroup, which saw a 58 per cent fall while Bank of America’s investment banking fees also more than halved.
Jamie Dimon, JPMorgan’s chief executive, said: ‘Global investment banking fees were down significantly in a challenging environment.’
The figures come amid speculation that high-earning bankers in London and New York are facing a gloomy start to the year with job cuts and lower bonuses on the way – after a bumper period a year earlier as economies reopened from lockdowns. Goldman Sachs, which reports its results next week, has already begun a cull of 3,200 roles.
Some of the setback suffered by investment bankers was offset by the performance of other parts of Wall Street firms’ operations.
Profit margins on lending have been boosted by the US Federal Reserve’s aggressive path of interest rate hikes. At JPMorgan, overall profits were up 6 per cent to £9billion, boosted by an upbeat performance from its trading revenue.
It was a mixed bag elsewhere with Bank of America up 2 per cent but Citi down 21 per cent and Wells Fargo off 50 per cent as it faced fines for settling scandals from recent years. The banks also set aside a combined £3.3billion in anticipation of loans turning sour amid the downturn, led by a £1.1billion provision from JPMorgan.
