With solid earnings of $6.5 billion in the second quarter, the Big Bank seems to be rebounding after a year of negative press related to the $6.2 billion loss by the “London Whale.” However, despite the strong numbers, Wall Street responded with a collective shrug. A lot of the earnings came from releasing loan reserves, and the bank indicates its mortgage business would suffer as rates rise.
With all that money rolling in, according to GOP economics, the bank should be hiring new workers, right?
Of course not, they're going to accelerate their cost-cutting plans:
JPMorgan Chief Financial Officer Marianne Lake said "there could be some acceleration" in previously announced cost-cutting targets, depending on market conditions.
In February, the largest U.S. bank by assets said it planned to cut 17,000 jobs by the end of 2014, or roughly 6.6 percent of its workforce. The job cuts were largely targeted at areas such as mortgage banking and retail banking.
Lake said JPMorgan remains on track for its targets, but "given what's going on in the market, there could be some acceleration." The mortgage business, which benefited from a wave of refinancing amid record-low interest rates, is expected to cool down as rates begin to rise.
JPMorgan is the second largest U.S. mortgage lender after Wells Fargo with an 11 percent market share.
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