JPMorgan Chase & Co. (JPM): Three Signs That It Is Giving Up

Page 1 of 2

JPMorgan Chase & Co. (NYSE:JPM)After a stellar 2012, in which U.S. banks produced income levels to rival pre-crisis highs and some pretty decent first-quarter reports from the likes of Wells Fargo & Co (NYSE:WFC) and JPMorgan Chase & Co. (NYSE:JPM), big banking seems poised for a slowdown. The primary culprit will be the mortgage industry, which the Mortgage Bankers Association notes will decrease home lending over the rest of this year, compared to last, by 16%.

While some banks, notably Wells Fargo & Co (NYSE:WFC) and Bank of America Corp (NYSE:BAC), are fighting back against this trend, JPMorgan Chase & Co. (NYSE:JPM) appears to have made peace with the idea of lower profits for the remainder of 2013. The big bank seems to be exhibiting some malaise in areas other than mortgage banking as well. Here are three reasons I think JPMorgan is in a funk.

1. Huge staff cuts
Although many megabanks are promising to slash employee numbers this year, JPMorgan has the largest number of pink slips at the ready — 17,000, to be exact, constituting nearly 81% of the combined 21,000 that the six biggest banks plan to trim before the end of next year.

Layoffs are to be expected as troubled loan portfolios become more manageable, but these cuts are huge and approximately 14,000 of those layoffs are said to come out of the bank’s mortgage unit. At the same time, Wells and Bank of America Corp (NYSE:BAC) are both adding to their mortgage departments. Perhaps JPMorgan Chase & Co. (NYSE:JPM) is responding to first-quarter numbers that showed an increase in year-over-year mortgage originations of 37%, while delivering a 31% dip in net income due to narrower margins.

2. The bank has dropped out of the Euromoney FX poll
After falling a few notches in the Euromoney foreign exchange listing last year, JPMorgan has decided to no longer participate in the survey, in which investment banks ask for customers’ support in an effort to climb higher in the rankings.

Does this matter? It might, as this yearly ritual apparently has some effect on rankings. Though observers note that Goldman Sachs Group, Inc. (NYSE:GS) also stopped canvassing for votes several years ago, it was also noted that JPMorgan Chase & Co. (NYSE:JPM) could drop another tier in the rankings because of this decision.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!