JPMorgan Chase CEO warns that the bank may be too small too succeed

Jamie Dimon

JPMorgan Chase & Co. CEO Jamie Dimon spoke on Tuesday at JPMorgan Chase & Co.’s annual investor day, warning that the bank may now be too small to succeed.

Dimon argued that banks like JPMorgan Chase & Co., America’s largest bank by assets, are not big enough to compete with larger foreign banks.

“We have one of the least consolidated banking systems in the world,” Dimon said at the annual JPMorgan investor day, CNN reports. “Would it be great for America if Boeing and Caterpillar were to use Chinese banks?”

In the past year, JPMorgan Chase & Co. opened over 200 new branches, while rivals Bank of America and Citigroup appear to be shrinking. Some analysts argue that the bank would be more valuable if it were broken up.

Dimon said that he does not intend to break up the financial giant and contends that the bank benefits from its size, even in the face of new capital rules required under recent financial reforms, CNN reports.

Dimon also spoke to banks’ compensation-to-revenue ratios, which are typically used to analyze bank pay. Both lawmakers and the media have criticized the salaries and bonus pay of bank executives, citing the pay as playing a role in the 2008 financial crisis. Dimon deflected the criticism and honed in on the media.

“Obviously our business, in investment banking in particular, all of our businesses, we have high capital and high human capital,” Dimon said, according to Bloomberg. “Newspapers – I went out and got this one day just for fun – 42 percent payout ratio, which I just think is damned outrageous.”

January figures show that JPMorgan Chase & Co. paid approximately 34 percent of the investment unit’s revenue in compensation. Dimon directed comments to the media audience, making note of journalists’ low pay.

“Worse than that, you don’t even make money!” Dimon said, according to Bloomberg. “We pay 35 percent. We make a lot of money.”

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