JPMorgan's Jamie Dimon gushes about tax cuts

Effects will grow economy, he says

By PAUL R. LA MONICA
Headline Goes Here Mark Wilson/Getty Images

Jamie Dimon, who serves as the Business Roundtable's chairman, predicted that overhauling the outdated tax system will make the United States more competitive and eventually help American workers.

NEW YORK (CNNMoney) - You can count JPMorgan Chase CEO Jamie Dimon as another big fan of President Trump's corporate tax cut -- even though it cost his company more than $2 billion last quarter.

Dimon called tax reform "a significant positive outcome for the country" in a statement released with the bank's earnings report Friday.

"U.S. companies will be more competitive globally, which will ultimately benefit all Americans," Dimon added. "The cumulative effect of retained and reinvested capital in the U.S. will help grow the economy, ultimately growing jobs and wages."

Dimon also said that the company would increase and accelerate some of its investments in employees. He didn't elaborate, but that could be code for wage increases or special bonuses.

On a conference call with reporters, JPMorgan Chase chief financial officer Marianne Lake said more details would be announced in the coming weeks.

She also suggested that the company could reward investors with more stock buybacks and increased dividends.

Several other large companies, including JPMorgan Chase rivals Bank of America, Fifth Third and Wells Fargo, have already announced plans to boost salaries and give out bonuses.

Still, the tax cut approved by Congress and signed into law by Trump late last year did cut into JPMorgan Chase's profit in the fourth quarter.

Earnings fell 37% from a year ago, to $4.2 billion. That was mainly due to one-time charges totaling $2.4 billion. The bank had to write down the value of its deferred tax assets -- JPMorgan's tax rate is about to go down, making those assets worth less. Other banks are expected to do the same when they report their fourth quarter results.

But excluding the short-term hit from tax reform, JPMorgan Chase said that profit fell just 1% to $6.7 billion, or $1.8 billion. That topped Wall Street's forecasts,

Revenue grew 5% as well, to $25.5 billion. That also was better than what analysts were expecting. JPMorgan Chase said that the increase was led by rising interest rates as well growth in loans and deposits for consumers.

The one down spot for the bank? Revenue from its markets division plunged 26% in the quarter from a year ago.

The lack of volatility in the stock and bond markets lately is actually not a good thing for big banks. They do better when markets are a little noisier since that tends to lead to increased fees from trading.

JPMorgan Chase also said it lost $143 million on a margin loan to one client. During the call, Lake revealed it was to struggling South African retailer Steinhoff, which has been hit by an accounting scandal.

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