JPMorgan sees investment-banking fees falling by mid-teens

Bloomberg

JPMorganChase 's second-quarter investment-banking fees could decline by more than analysts are expecting as volatility set off by President Donald Trump's policy announcements continues to chill deals.

Troy Rohrbaugh, co-CEO at JPMorgan's commercial and investment bank, said it expects investment banking fees to fall by a percentage in the mid-teens compared to a year ago — more than analysts had predicted. Shares in the bank fell by more than 2% before paring some of those losses. Other Wall Street deal-making giants including Goldman Sachs Group and Morgan Stanley also declined.

A lot of clients "tapped the brake" amid the volatility, Doug Petno, Rohrbaugh's co-head, said during the bank's investor day Monday. Trump's policies and his global trade war have stymied mergers and acquisitions while plans to list have also been put on ice.

Still, JPMorgan expects that markets revenue — its equities and fixed-income trading businesses — could rise by a percentage in the mid-to-high single digits on the prior year, Rohrbaugh said.

The bank's stock traders took in a record haul in the first quarter, as they benefited from the turbulence, and Chief Executive Officer Jamie Dimon said last week he expects the volatility to continue.

When it comes to private credit, JPMorgan wants to "sit at the center of this ecosystem," Rohrbaugh said. He pointed to the $50 billion the bank has set aside to capture a bigger chunk of the fast-growing market.

Wall Street's dimmed hopes about the Trump administration have dashed projections for banker bonuses in 2025.

Incentive compensation for some investment bankers could fall by as much as 20% in 2025, according to a report from the compensation consulting firm Johnson Associates, as the banks' corporate clients hit pause on major strategic moves amid geopolitical uncertainty and market volatility.

The report estimates that incentive pay for Wall Street employees across major banks will fall by 13% from 2021 — steeper than the projected declines at insurance companies, private equity firms, wealth managers and hedge funds. Those figures could change throughout the year, as policies on interest rates and trade continue to evolve.

"Tariffs and geopolitical concern are [the] biggest wildcard," the report said.

The incentive pay cuts on Wall Street could be especially stark after a high-flying 2024. Last year set a record for incentive pay in New York City's securities industry, per a report from New York State Comptroller Thomas DiNapoli.

Last year's bonus pool was up by more than one-third from the prior year, at $47.5 billion, marking the largest total pot since at least 1987. The average bonus paid in 2024 was $244,700, which marked the first major bump since 2021.

In 2025, slow merger and acquisition activity and the pausing of initial public offerings will dampen advisory fees and equity underwriting revenues, Johnson Associates predicts. Employees across corporate staff, advisory units, equity underwriting and retail and commercial teams could see their incentive pay drop 5% to 20%, the report found.

JPMorgan, Bank of America, Morgan Stanley and Goldman Sachs all reported record stock trading activity in the first quarter, but executives at those banks expressed caution during their first-quarter calls last month due to the roller-coaster trade policies.

—Catherine Leffert contributed to this article.