JPMorgan Chase & Co. (NYSE:JPM) CFO Marianne Lake joined Bloomberg TV’s Stephanie Ruhle and Erik Schatzker for a special edition of “Market Makers” in honor of International Women’s Day. She discussed JPMorgan’s performance and outlook, and women in executive roles.
Lake said the $27 billion profit outlook the bank laid out at an investor conference last month wasn’t a target: “That’s not a forecast. It’s not a budget. It was a simulation. And it was really predicated only on those things that we’re really certain of, investments we’ve been executing for years…I think there’s every reason to believe that it’s biased to the conservative.”
- Understand customers negative perception of banks
- All four businesses performing exceptionally well
- January trading wasn’t as strong as expected
- Trading hampered by lack of client conviction
- Regulation has turned cfo unit into nerve center
- JPM has ‘best hand’ among banks
- ‘we will win’ amid industry changes
- $27b profit outlook isn’t target or forecast
- $27b profit outlook is biased conservatively
JPMorgan CFO: $27B Profit Outlook Not Bank’s Target
STEPHANIE RUHLE: Well let’s get right to our first guest because I’m super excited about this one. She’s one of the most powerful women in finance, Marianne Lake, Chief Financial Officer of JPMorgan. Marianne, welcome. You have a big, big job, CFO of JPMorgan.
So clearly your day job is full, but you’re also involved in JPMorgan’s Women on the Move tour. You’re traveling around the world talking to women at all levels inside the bank about their jobs. What’s the business case for that? Should JPMorgan shareholders feel good that you’re spending your time talking to all these women in the bank?
MARIANNE LAKE: So there’s loads of research that shows that women on boards, and C-suites and in management positions in companies, the companies generally perform better, but even if they didn’t, even if they didn’t we’re committed to diversity in JPMorgan. And when I’m on the road I’m seeing investors, I’m seeing clients, I’m seeing our employees. And so to spend some time having a direct dialogue with the women in our firm is a valuable use of my time. And we’re getting feedback from them all of the time. We’ve been to 12 cities, 4,000 women, over 200 pieces of feedback. And we’re making positive change.
ERIK SHATZKER: You are one of the most important people at the biggest bank in America. How do you decide how to balance your time, how much you should invest in initiatives like that, and how much you can’t afford to invest in initiatives like that?
LAKE: Right. So it’s all part of my job. And I have to balance every day, depending on what’s going on, but managing finance like a business, managing our team, managing our people is a critical part of managing the firm through the long run. So it’s an important part of the job and we’re going to dedicate time to it.
RUHLE: How is JPMorgan leading through all this? Just a few years ago people felt Jamie Dimon he’s America’s favorite banking CEO. And he sort has become public enemy number one, whether it’s populous opinion, the Department of Justice, while your employees don’t seem to be walking out the door, your customer feedback is higher than ever and your stock is doing so well. How are you making that happen?
LAKE: Well if you just take the customers in the first instance, if you ask customers about the industry the perception is negative. And I understand that. Perception one day hopefully will catch up with reality, but if you ask our customers what they think of JPMorgan and Chase, they like us, they like their bankers. They trust us and they recommend us. So we are focused on serving our clients, our communities and our customers transaction by transaction every day.
RUHLE: Then are you also focused on changing populous opinion? Who’s responsible to get America to start liking banks again?
LAKE: And we do have a responsibility. And the way we do it first and foremost is grass roots. It’s at that customer engagement level. It’s just treating people exceptionally well and with great products, and services and with respect. But we’re also working that through our foundation of philanthropic effort then. And we have a role in politics and in reform.
SHATZKER: Has that required a conscious and deliberate effort to avoid, call it a bunker mentality, because Stephanie and I know lots of bankers. And they’ll tell us, and they do that the negative press, the bad headlines can really get to you.
LAKE: Yes. There’s obviously an impact. And everybody in our firm wakes up every day, and reads the paper, and sees the news and there’s an impact, but we just lead by example, which is we’ve always had a culture at JPMorgan of focusing on the negatives, accepting our issues, fixing them, resolving them. And we’re leading from the front. So I think that underneath all of that our businesses are performing exceptionally well, all four of them. Our clients are very happy and our people are remaining motivated.
RUHLE: But revenue if you look at fixed income and equities, drivers where we’ve seen huge revenue year after year, and that’s where your rock stars reside, and those numbers are down. Are they ever coming back?
LAKE: It’s not [already] rock star. All of our businesses are performing strongly. And that’s part of their benefit of our diversified business model, but if you look at a January you expect it to be exceptionally strong in market. And we just didn’t see that this year. And it was a lack of client conviction. It was fixed income. It was equities. It’s across products and it’s just been a soft start to the year.
There’s no one reason for it. There’s a number of factors playing into it. And we have no reason to believe we aren’t going to bounce back. You said it yourselves that there’s reasons to be hopeful in the second quarter. The market seems to think that this a temporary disruption. The Fed seems to believe so too. So we’ll see.
SHATZKER: Marianne, I want to ask you about your job. You’ve been chief financial officer for a little more than a year. Is that right?
LAKE: Yes, correct.
SHATZKER: So how’s the chief financial officer’s job at JPMorgan Chase & Co. (NYSE:JPM) and perhaps at other large banks in America, maybe even in Europe evolved over the past six, seven, eight years? What was it like before the crisis to the best of your knowledge, because you didn’t have it, relative to what’s it like now?
LAKE: Well in many ways it’s the same. And if I talk between –
SHATZKER: And lots of the same things now, today.
LAKE: Right. So if we talk to JPMorgan, well and if we talk about JPMorgan Chase & Co. (NYSE:JPM) when we look at the CFO role we think about it as really a partner to the whole OC in running the firm, and running the businesses, and driving change and executing on the agenda, but if you think about today with capital, and regulation and controls being so front and center, like navigating this, the complexities of this new financial architecture has sort of throwing