The likelihood of Fed rate cuts is causing banks to plan for less net interest income, but it would be a mistake for JPMorgan to back off its move into new markets and tech investments, Jamie Dimon says.
The Treasury Secretary says Facebook’s cryptocurrency plan creates national security issues; the New York Fed chief tells financial firms to stop dragging their feet and move on from Libor.
Granted, the bank's earnings per share topped estimates in the second quarter, but its forecast on net interest income suggests it will be harder for JPMorgan Chase to offset declining revenue from trading stocks and bonds.
The company could rein in deposit costs, cut operational expenses and buy back more shares in anticipation of a Federal Reserve rate reduction. Other banks — especially big ones — could do the same.
Investors eye how low rates, flat yield curve will affect bank profits; agency is determining if it has oversight power over Facebook’s planned cryptocurrency.
Credit quality and loan growth are also topics of interest, but industry observers say the second quarter could separate the haves from have-nots when it comes to low-cost funding.
