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JP Morgan cuts expected net interest income

UNITED STATES (OBSERVATORY NEWS) — Leading U.S. bank JP Morgan Chase has forecast that net interest income for the full year 2020 will fall slightly year-on-year to $ 57 billion.

This is because lending operations are being squeezed by the impact of falling interest rates.

The bank held an investor event in New York on the 25th. According to the presentation material posted on the website in advance, the target for tangible return on equity (ROTCE) is unchanged at 17%.

The OHR, which represents the ratio of operating expenses to gross operating profit, is expected to fall below 55% over the medium term.

JP Morgan emphasized recent achievements that outpaced its competitors, but also showed caution on multiple challenges it faces.

In particular, he noted pressure on credit card fees, a shift from active investment to passive investment, and a decline in demand for trading services. He said that interest rates remained near the low level for the first time in several years, which also reduced earnings.

“We cannot escape the impact of the interest rate environment,” he said in a presentation.

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