Bonuses cut at JP Morgan as deals dry up

Investment bankers at JPMorgan are facing bonus cuts of up to 30 percent after a slump in deal closing took away some of the revenue on Wall Street.

Companies have shuttered as the recession looms, depriving New York’s top banks of lucrative fee income.

JPMorgan was among those counting costs yesterday, when it revealed a 57 percent drop in fourth-quarter investment banking revenues to £1.1 billion.

It was a similar story at Citigroup, which saw a 58 percent drop while Bank of America’s investment banking costs also more than halved.

Jamie Dimon, CEO of JPMorgan, said: “Global investment banking costs have fallen significantly in a challenging environment.”

The figures come amid speculation that high-earning bankers in London and New York are facing a dismal start to the year with job cuts and lower bonuses on the way – following a stellar period a year earlier as economies reopened after lockdowns. Goldman Sachs, which reports its results next week, has already begun a culling of 3,200 rolls.

Some of the setbacks suffered by investment bankers were offset by the performance of other parts of Wall Street firms’ businesses.

Profit margins on loans have risen due to the aggressive rate hikes by the US Federal Reserve. At JPMorgan, total profits rose 6 percent to £9 billion, boosted by a positive trading income performance.

Elsewhere it was a mixed bag with Bank of America up 2 percent but Citi down 21 percent and Wells Fargo down 50 percent as it faced fines for scandals in recent years. The banks also collectively set aside £3.3bn in anticipation of loans that would turn sour during the recession, led by a £1.1bn provision from JPMorgan.