JPMorgan Chase warns that bonuses for investment bankers will FALL 30% after a ‘pretty anemic year’

JPMorgan Chase exec warns that bonuses for investment bankers will FALL by 30 percent after a ‘pretty anemic year’: ‘If the performance isn’t there, the compensation isn’t going to be there’

  • Vis Raghavan’s, CEO of the companies oversees operations, warned investment bankers should brace for a 30 percent bonus cut 
  • JPMorgan Chase announced revenue was down 57 percent in the fourth quarter 
  • The company experienced a low performance in cash equities 
  • Bank officials previously claimed they were preparing for an economic ‘hurricane’ due to the war in Ukraine and Federal Reserve

Investment bankers at JPMorgan Chase are bracing for a bonus cut up to 30 perfect after the firm’s Europe, the Middle East, and Africa CEO claimed it has been a ‘pretty anemic year.’

The announcement by Vis Raghavan, CEO of the company oversees operations, comes as the investment banking revenue was down 57 percent in the fourth quarter with $1.4 billion reported, according to Bloomberg.

The bank suffered from a decrease in cash equities but thrived in the areas of rates, macro, and commodities.

‘All banks pay for performance, so if the performance isn’t there, the compensation isn’t going to be there,’ Raghavan told the news outlet. ‘It’s been a pretty anemic year in terms of volume.’

Citigroup Inc. and Bank of America Corp. also warned their investment bankers might see a slash in their bonus checks. 

Vis Raghavan's, CEO of the companies oversees operations, warned investment bankers should brace for a 30 percent bonus cut

Vis Raghavan’s, CEO of the companies oversees operations, warned investment bankers should brace for a 30 percent bonus cut

JPMorgan Chase announced revenue was down 57 percent in the fourth quarter

JPMorgan Chase announced revenue was down 57 percent in the fourth quarter

The bank’s American CEO Jamie Dimon also echoed Raghavan’s warning and claimed banking fees were significantly down, according to The Guardian. 

The decrease in investment banking has occurred since the Russia-Ukraine conflict which made investors more aware of their money. 

Dimon sounded the alarm about the immediate forecast for the US economy last year, warning that inflation may soon wipe out consumer wealth and send the country into a recession. 

In June, Dimon, 66, flagged to the public that he was preparing his bank – the largest on Wall Street – for an economic ‘hurricane’ on the horizon. In part, that assessment was due to the ongoing war in Ukraine and a number of moves coming out of the  Federal Reserve. 

Despite the concern, JP Morgan hired about 23,000 new employees adding to their nearly 300,000 workforce, according to the news outlet.

Bank of America CEO Brian Moynihan also expressed Dimon’s concern and told investors at a Goldman Sachs financial conference that Bank of America’s research shows ‘negative growth’ in the first part of 2023, but the contraction will be ‘mild.’

‘Economic growth is slowing,’ Goldman Sachs’ chief executive David Solomon said. ‘When I talk to our clients, they sound extremely cautious.’

In banking, the job market remains ‘surprisingly tight’ and competition for talent is ‘as tough as ever,’ he said.

This graph shows how the bonus pool has increased to $45billion over the years. In 2021, banks gave out the largest bonuses since 2006. The number is anticipated to decrease dramatically

This graph shows how the bonus pool has increased to $45billion over the years. In 2021, banks gave out the largest bonuses since 2006. The number is anticipated to decrease dramatically 

Last year, banks generated nearly $71 billion in U.S. investment banking revenue, according to Dealogic. Investment banking revenue in the United States is expected to have dropped more than 50 percent from last year

Last year, banks generated nearly $71 billion in U.S. investment banking revenue, according to Dealogic. Investment banking revenue in the United States is expected to have dropped more than 50 percent from last year

Inflation in the final month of 2022 slowed to 6.5 percent - the slowest its growth has been since October of 2021

Inflation in the final month of 2022 slowed to 6.5 percent – the slowest its growth has been since October of 2021

The Fed rapidly raised interest rates in 2022 to fight inflation, increasing recession risks

The Fed rapidly raised interest rates in 2022 to fight inflation, increasing recession risks

The consumer price index rose at the fastest rate in 40 years earlier in 2022

The consumer price index rose at the fastest rate in 40 years earlier in 2022

Last month the news broke that bankers in London and New York would see about a 30 to 50 percent decrease in their bonuses despite banks granting the largest amount since the 2006 recession in 2021, according to Reuters. 

Goldman Sachs Group Inc. was predicted to see 40 to 45 percent decline in bonuses while Morgan Stanley was expected to drop  35 to 40 percent.

Bank of America and Citigroup Bank will likely see a 30 to 35 percent decrease, Reuters reported.  

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