JPMorgan’s Investor Day says it will cut investments in bankers and traders to $100 million by 2024

It’s investor day at JPMorgan. ✨ On JPMorgan’s last investor day of 2023, it said it would invest $200 million in bankers and traders. A year later, it is still hiring at the commercial and investment bank (CIB), although less enthusiastically than before.

Speaking today, Daniel Pinto said that while a soft landing for the economy is likely, there are also “quite substantial” tail risks associated with geopolitics that are higher than historical inflation: “If we are wrong, we need to be prepared for the way we do it. I am going to position the company in the right way,” he warned.

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JPMorgan will invest $100 million in ‘revenue producer/adjacent revenue’ roles by 2024

In 2023, JPMorgan said it would spend $200 million on new revenue producers and adjacent roles. This year, that investment has been reduced to $100 million. JPMorgan’s front office hires will be 50% less diligent.

Where will the $100 million in hiring happen? JPMorgan says it wants to “accelerate” business growth in “key corridors” by 2024.

Last year, JPMorgan said it would hire bankers focused on financial sponsors, private capital, international and the carbon transition. This year the bank is less clear, but says it wants to add bankers to “all global sector coverage teams,” to “increase M&A and ECM capacity and expertise,” to expand its mid-market coverage and to ‘deepen’ the coverage. in ‘regions with high potential’. Those regions are EMEA and APAC, where the bank says it wants to ‘strengthen’ its presence.

JPMorgan wants more middle-market bankers

JPMorgan said today it has 700 mid-market bankers, after signaling its intention to hire 500 mid-market bankers within two years by 2023. The company is now building a dedicated team to target mid-market financial sponsors, but it’s not clear how many mid-market banker targeted hires it has yet to make.

JPMorgan is all about “innovation” bankers

Between 2022 and 2023, JPMorgan says the number of bankers focused on the “innovation economy ecosystem” will increase by 150%. Bankers in this area focus on: software, fintech, disruptive commerce, health technology, applied technology, internet, climate technology and life sciences. It’s not clear whether hiring will continue at the same pace in 2024, but innovation banking remains an area of ​​focus, along with “coverage of venture capital clients and portfolio companies.”

JPMorgan invests in e-trading and market structure

JPMorgan is still focused on improving its e-trading capabilities and investing in market structure expertise. It may also hire people who can interact with multi-strategy hedge funds: the bank says it wants to deepen relationships with “increasingly complex financial institutions” and “non-banks.”

JPMorgan plans to invest in private credit

Goldman Sachs wants to triple its exposure to private credit. JPMorgan does not put a number on its ambitions, but today’s presentation confirms its intention to expand in the private credit sector. Bloomberg reported in January that JPMorgan was in talks to secure up to $3 billion in third-party investment for its private credit deals.

JPMorgan is investing in data, technology and AI, but the biggest growth is in regulatory technology

When JPMorgan announced plans to ramp up technology spending last year, it caused some discontent among investors. In today’s investor day presentation, JPMorgan said it plans to specifically increase technology spending in the CIB from $3.4 billion in 2023 to $3.6 billion in 2024, an increase of 3%.

Within the CIB, technology spend is broken down between platforms, products and experiences, infrastructure modernization and regulations, risks and controls.

$2 billion of JPMorgan’s 2024 CIB technology spend will be allocated to platforms, products and experiences, including electronic trading, pricing, risk management and data solutions. This is an increase of 5% compared to last year.

$1.2 billion of JPMorgan’s 2024 CIB technology spend is allocated to infrastructure modernization. This is the same as last year.

$0.4 billion of JPMorgan’s 204 CIB technology spend is allocated to regulatory risk and controls. This is 33% more than last year and has doubled since 2019. If you want to work in the technology sector at JPMorgan’s investment bank, this is where the really big growth is.

JPMorgan invests in AI

As we noted last month, JPMorgan already employs about 2,000 people in the artificial intelligence field. Pinto said today that JPMorgan’s AI use cases are now generating between $1 billion and $1.5 billion in revenue equivalent across the bank.

However, investments in AI also create opportunities to reduce workforces. Pinto also said today that JPMorgan employs 60,000 developers and 80,000 people in operations and call center jobs. The bank wants to use AI to reduce this workforce. She has already managed to increase efficiency in one area while reducing workforce by 20%. “The idea is to look at everything,” Pinto said. Mary Callahan Erdoes, the CEO of the asset management division, arrived on stage today with a lame song that she said was written by AI; Presumably this functionality will not replace existing staff.

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