NEW YORK (Reuters) – JPMorgan Chase expects its net interest income (NII), the difference between its interest amounts on loans and the amounts paid on deposits, to increase in 2024 more than previously reported, thanks to high interest rates and despite economic uncertainty, bank executives said Monday during an investor day.
The American bank on Monday raised its RNI forecasts to 91 billion dollars (83.8 billion euros), excluding market divisions, a figure higher than the forecast of 89 billion dollars announced last April.
The American bank’s shares fell 0.49% on the New York Stock Exchange at 2:08 p.m. GMT.
JPMorgan’s previous forecasts for its RNI disappointed analysts, who expected the bank to benefit more from the high interest rate environment.
“The environment is becoming more complicated,” Chief Financial Officer Jeremy Barnum told investors, citing tougher regulations and geopolitical uncertainty.
The evolution of the RNI will probably be “oscillating” over the coming quarters, with rises and falls, he warned.
The U.S. economy should be able to avoid a major recession and head toward a soft landing, but the bank is prepared for the risks to that scenario, said its president, Daniel Pinto.
JPMorgan added billions of dollars in loans to its balance sheet after buying collapsed First Republic Bank in May 2023, which fueled RNI and helped propel its profits to a record high.
Technology spending is expected to increase from $15.5 billion in 2023 to $17 billion this year, according to Jeremy Barnum.
Part of this spending will be devoted to artificial intelligence (AI), whose use cases represent a value of approximately $1 billion to $1.5 billion, according to Daniel Pinto.
More broadly, the bank’s total spending is expected to increase to around $92 billion in 2024, from $85.7 billion in 2023, according to a presentation.
The bank also plans to increase share buybacks to return excess capital to shareholders, while remaining prudent, said Jeremy Barnum.
(Reporting Nupur Anand in New York and Manya Saini in Bangalore; French version Diana Mandiá)
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