VOL. 128 | NO. 73 | Monday, April 15, 2013
JPMorgan CEO: 'Work to Do' on Controls, Compliance
CHRISTINA REXRODE | AP Business Writer
NEW YORK (AP) – Jamie Dimon, head of JPMorgan Chase, says that grappling with new regulations and strengthening internal controls are the bank's top priorities.
In a call with reporters Friday to discuss first-quarter earnings, he said that the bank would be aggressive in making changes, opting for quick decision-making over consensus building.
"We've got to get these things fixed," Dimon said.
His comments came as JPMorgan reported soaring quarterly profits, but slightly lower revenue. Cost-cutting and lower reserves for bad loans helped the bottom line.
In many respects, it's been a tough year for the bank's public image. It was almost a year ago that JPMorgan confirmed a surprise trading loss that eventually ballooned to $6 billion.
A Senate panel issued a withering report last month on how the bank dealt with the loss. The panel said JPMorgan played down the risks of its trades and hid losses from regulators. JPMorgan has said it made mistakes but never intended to mislead the government.
Dimon, who is chairman and CEO of JPMorgan Chase, said the bank still has "work to do" to make sure it is in line with new regulations. It also expects more sanctions from regulators.
Another black eye last month came when the Federal Reserve told JPMorgan Chase, along with Goldman Sachs, that it needed to strengthen its capital plan. The bank said Friday it was shuffling resources and having more conversations with the Fed. Dimon said the Fed's criticisms focused on matters like the level of detail it reported to the Fed, and not around the numbers themselves.
Dimon's next big test is the annual shareholder meeting in Tampa, Fla., next month. Shareholders will vote on a proposal asking the board to split the roles of CEO and chairman. The vote could be a referendum on Dimon, since it could force him to give up one of the jobs. Last year, 40 percent of votes cast were in favor of splitting up the roles.
In a call with reporters, Dimon deflected multiple questions about the impending vote.
"I'm not going to go into what the board wants to do," Dimon said.
In a public company, the board of directors is made up of advisers, mostly from outside the company, who are in charge of hiring and firing the CEO. The chairman of the board is often the company CEO. Many shareholder activists argue that the jobs should be split. It's impossible for a board to keep the reins on a CEO, they argue, when he's also running the board.
The board said in a recent regulatory filing that keeping Dimon in both jobs is "the most effective leadership model" for JPMorgan, noting how the bank has grown revenue and profit under him.
Dimon demurred on a reporter's question about reports that he had just bought former office space in the ground floor of his Park Avenue apartment building.
"He's not commenting on that," said his spokesman, Joe Evangelisti.
Said Dimon: "That has more to do with my wife than with me."
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.