JPMorgan's investment bank: Revenues up, profits up, pay up; headcount flat
It's results day for various US investment banks, including JPMorgan. While all is going well on many metrics, there are signs that getting a job at JPMorgan might not be as easy as simply picking up the phone and offering your services.
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Although revenues at JPMorgan's corporate and investment bank (CIB) rose 21% year-on-year in the third quarter and although net income was up 17% over the same period, headcount was largely flat.
954 people were added between the second and third quarters, but the additions only offset cuts in the first quarter of this year. Third quarter headcount increases typically reflect the arrival of graduate classes.
JPMorgan's CIB is therefore doing more than before with the same amount of employees. CEO Jamie Dimon said today that the bank is thriving and that “Each line of business performed well." The last time that JPMorgan reported results, CFO Jeremy Barnum said something similar, noting that: "It's hard to imagine a set of conditions that would be any better for us."
Why isn't JPMorgan on a recruitment drive then? It is, but only, it seems, for the sorts of senior rainmakers who can bring in business. It's added 100 of these so far this year.
Today's results suggest that more widespread hiring isn't happening, yet. The question now is when - and whether - it will. Around 60% of the people in JPMorgan's CIB work in middle and back office jobs. As those roles are increasingly automated, jobs are disappearing. Speaking today, Barnum said the bank is consciously refraining from adding headcount as a reflex reaction and that AI isn't the only factor keeping the bank's headcount from increasing. It's more about old fashioned expense discipline, he observed.
People who do work for JPMorgan's CIB may be paid more this year than last year. The bank also said today that it has accrued higher compensation expenses than before.
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