JPMorgan boss Jamie Dimon’s annual letter to shareholders is always an eagerly awaited affair. What did he have to say this year?
Global conflict and social media
Speaking on global challenges, much of the focus was on conflict. "Across the globe, 2023 was yet another year of significant challenges, from the terrible ongoing war and violence in the Middle East and Ukraine to mounting terrorist activity and growing geopolitical tensions, importantly with China,” said Dimon.
On America’s position and world cop, he said the superpower’s “global leadership role is being challenged outside by other nations and inside by our polarized electorate”.
Social media also got a mention: There is no question that social media has some real negative effects, from the manipulation of elections to the increasingly documented negative effects on the mental health of children.
“These are issues impacting our individual and collective spheres, and it’s time for social media companies to take more action to remedy these challenges — and swiftly.
“Rapid advances in technology will not only make these existing issues harder to address, but they will likely create new ones.”
Dimon avoided suggesting any direct or indirect political leanings. MAGA conservatives will likely take umbrage at his support for diversity and inclusion and liberal economic values, even though Dimon has praised Trump in the past.
Regarding regulation
Democrats, on the other hand, might sniff at Dimon’s suggestion to reduce bureaucratic overreach in the financial system.
“Without real analysis of expected outcomes, additional regulation will likely reduce the number of banks offering certain services and increase costs for all market participants and activity, including loans, market making and hedging (by farmers, airlines and countries, among others),” said Dimon.
He called for a “detailed review and probably a complete revamp” of the banking regulatory and supervisory processes.
On artificial intelligence
He said artificial intelligence “will be extraordinary and possibly as transformational as some of the major technological inventions of the past several hundred years”.
Dimon told shareholders that JPM has been using AI for “over a decade” and has built out a team of more than 2,000 AI and machine learning experts and data scientists.
The bank is using AI for over 400 use cases spanning areas such as marketing, fraud and risk.
"In the future, we envision GenAI helping us reimagine entire business workflows. We will continue to experiment with these AI and ML capabilities and implement solutions in a safe, responsible way."
GenAI can also make some great mockups of what Jamie Dimon would look like as a robot (pictured).
On fiscal policy
Dimon was rather flighty on the issue of interest rates and fiscal policy.
He warned that the economy “is being fueled by large amounts of government deficit spending and past stimulus” which, combined with increased spending on green transition, “may lead to stickier inflation and higher rates than markets expect”.
The US economy remains “resilient, with consumers still spending, and the markets currently expect a soft landing”.
“Quantitative tightening is draining more than $900 billion in liquidity from the system annually — and we have never truly experienced the full effect of quantitative tightening on this scale,” he added.
2023 a ‘strong year’ for JPM
Like the broader US economy, Dimon espoused JPMorgan’s financial strength
"We grew market share in several of our businesses and continued to make significant investments in products, people, and technology while exercising strict risk disciplines," he said.
JPM earned $162.4 billion in revenues and net income of $49.6 billion in 2023, with return on tangible common equity (ROTCE) of 21%.
The bank nudged up its quarterly common dividend from $1 per share to $1.05 per share in the third quarter of 2023 and again to $1.15 per share in the first quarter of 2024.