JPMorgan Pledges $20 Billion for Loans, Jobs After Tax Cut
(Bloomberg) -- JPMorgan Chase & Co. plans to earmark $20 billion over five years to boost lending, expand its branch network and increase gifts to charity after its tax rate was lowered by the U.S. overhaul last month.
The bank will also raise hourly wages for 22,000 employees, hire 4,000 more people and add 400 branches in new cities and states. It will increase small-business and affordable-housing lending and bolster its philanthropic investments by 40 percent to $1.75 billion.
The nation’s largest bank joins major U.S. companies including Apple Inc. and Wal-Mart Stores Inc. in announcing wage and staff increases after the corporate rate was slashed in the Republican-led tax overhaul. The move means that JPMorgan is choosing to re-invest much of the more than $3 billion it’s projected to save. Bank executives have faced the choice of how much of their windfall to share with employees and customers versus returning more capital to shareholders through dividends and stock buybacks.
The investments are “made possible by the firm’s strong and sustained business performance, recent changes to the U.S. corporate tax system and a more constructive regulatory and business environment,” the New York-based company said Tuesday in a statement.
Chief Executive Officer Jamie Dimon was a major proponent of the corporate tax cut, arguing it would lead to fewer companies moving abroad and higher job growth.
JPMorgan will increase hourly wages to between $15 and $18 starting next month and some employees will receive a bonus of $750. The bank also said it will open branches in 15 to 20 new markets in several states. Consumer banking chief Gordon Smith said the lender isn’t yet in Boston, Philadelphia and Washington, D.C.
Glenn Schorr, an analyst with Evercore ISI, said the plans won’t affect JPMorgan’s targets for its efficiency ratio or operating leverage.
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