WASHINGTON — JPMorgan Chase (JPM) is focusing on simplifying its businesses and improving compliance with regulatory requirements, Jamie Dimon said in an email to employees on Tuesday.
The bank's chairman and chief executive said that its recent exit from the student lending business and elimination of its physical commodities sales and trading businesses was an attempt to "refocus our priorities."
"We have been asking our senior people to eliminate products and services that are not essential to serving our customers and are not core to our business," Dimon wrote.
In the lengthy email, Dimon said the bank is also working to confront the regulatory challenges facing it, including reviewing its foreign correspondent banking business, improving oversight of outside vendors, and adding regulatory compliance staff.
The email comes as JPMorgan Chase nears a $750 million to $800 million settlement with regulators related to last year's "London Whale" trading scandal. An announcement could come as early as this week.
It also is yet another sign of a newly resurgent Dimon who, after the criticism he took over the Whale incident, successfully fought off an attempt by shareholders to strip him of his chairman title earlier this summer. Since then, he has become more outspoken about the issues facing the industry and his company.
The regulatory settlement is expected to include an admission of wrongdoing by the bank. Although Dimon did not reference it directly, he said in his email that if "you don't acknowledge mistakes, you can't fix them and learn from them."
"So now, as in the past, we are recognizing our problems, rolling up our sleeves and fixing them," Dimon wrote. "Our control agenda is priority #1."
That includes a renewed focus on the bank's foreign correspondent banking business, an area that has gotten several large banks, including HSBC and Standard Chartered, into trouble recently with U.S. regulators.
JPMorgan Chase was slapped with a consent order from the Office of the Comptroller of the Currency in January over "critical deficiencies" with respect to its anti-money-laundering practices. Many observers expect regulators to impose a monetary penalty on the bank soon over those failures.
Dimon said JPMorgan Chase is strengthening its internal controls "particularly around 'Know Your Customer' and transaction monitoring."
He also said the bank is stepping up supervision of outside vendors, yet another area that has tripped up the bank.
"If a vendor or partner engages with our customers, we need to be as vigilant about their practices as we are about our own, particularly if they interact directly with customers," Dimon wrote. "We are also proactively trying to decrease the number of vendors we have, which reduces complexity in our business and creates more jobs internally."
This summer, JPMorgan Chase halted most sales to third-party collectors of credit card debts amid regulatory concerns over how it pursues payments from customers who are delinquent.
Dimon said that the bank has significantly boosted compliance resources, adding roughly 3,000 employees this year that are dedicated to risk, compliance and control efforts. The bank has also provided 750,000 hours of regulatory and control-related training related to topics like anti-money-laundering and Dodd-Frank implementation, he said.
Dimon added that he has also tried to build a "more open and transparent relationship with our regulators." He held town halls for examiners with the OCC, Federal Reserve Board and Federal Deposit Insurance Corp. in May and June. He also held a corporate town hall with bank employees who "regularly interact with regulators."
"We discussed our culture of transparency, stressing the necessity of fully and accurately reporting material issues to our regulators in a timely manner and responding promptly to their requests," Dimon said.
Dimon concluded by pledging to create a "best-in-class operating system" for the bank.
"Never before have we focused so much time, effort, brainpower, technological power and money on a single, enterprise-wide objective," he wrote. "Make no mistake — we are going to get this right."