JPMorgan Slides After Bank Reveals Slower Loan, Deposit Growth

Shares of the largest US bank dropped much as 1.7% in after comments by JPMorgan CFO Marianne Lake suggested that the bank's business prospects are slowing.

In slides prepared for its investor day, JPMorgan flagged a focus on high-quality loans and said it expects "a slower pace of growth."


The bank also said it expects slower industry deposit growth of ~2%, due to "quantitative tightening and higher rates"...


... and added that "slower deposit growth may increase need for more expensive funding."


This confirms the troubling findings in the latest Fed SLOOS survey which found that not only are loan standard tightening but demand for various loans is tumbling as a result mostly of higher rates, resulting in a broader economic slowdown.


Investors were also not happy that JPM didn't lift its 17% ROTCE target.


As Bloomberg adds, rising expenses are also triggering concern as the bank's 2019 expense outlook of more than $66 billion in 2019 has topped Goldman Sach’s estimated $64 billion. As a result, an earning-per-share estimate cut may also be in the works. Indeed, according to analyst Betsy Graseck, the slide presentation suggested a 3% “hit” to Morgan Stanley’s 2019 EPS estimate.

As a result of the latest admission of the slowing US economy, JPM stocks dropped over 1% in early trading.


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