JPMorgan Chase & Co.'s chairman and chief executive James Dimon told investors at a conference Wednesday that he is optimistic about the investment banking business.
Some on Wall Street were concerned that JPMorgan Chase's strong investment banking results in the first quarter are unsustainable, and Dimon said the second quarter would not repeat the record results. So far, however, the business is "OK" this quarter, he said at the Sanford C. Bernstein & Co. LLC Strategic Decision Conference in New York.
Dimon said JPMorgan Chase is "getting near the end of building loan-loss reserves" in investment banking.
Meanwhile, he said, his company has already stopped some credit card practices, such as double-cycle billing and universal default, that were prohibited by credit card legislation signed into law by President Obama. But other elements of the legislation, such as restrictions on risk pricing, could cost JPMorgan Chase about $500 million.
Dimon also estimated that the Federal Deposit Insurance Corp.'s recently adopted asset-based special assessment will cost JPMorgan Chase $700 million to $750 million.
He said he expects his company to generate aggregate preprovision net revenue of $80 billion for this year and next.
JPMorgan Chase came through the stress test conducted by the Treasury Department and Federal Reserve better than its big-bank competitors, but its own revenue assumptions exceed the government's by $7.6 billion.
Dimon also said the bank's home equity losses could reach $1.4 billion during the next several quarters. Prime mortgage losses could reach $500 million, and subprime losses could come in at $375 million to $475 million. Second-quarter credit card losses will approach 9% and "could trend up further" if the economy worsens.
The company says it expects "solid underlying growth in consumer banking" but that card charge volume would trend lower. Commercial banking revenue is expected to remain at first-quarter levels.
Separately, JPMorgan Chase has intensified an aggressive ad campaign highlighting the company's lending activities with a new Web site.
The site, the newest arm of the company's "The Way Forward" campaign, touts the message that Dimon has been delivering for months to investors and the media: JPMorgan Chase is healthy and lending.
The site features videos of Dimon and other top executives discussing how JPMorgan Chase lent $150 billion in the first quarter to 4.5 million customers. It also has links detailing how the company passed the government's stress test and what it is doing to modify home mortgages, among other things.
JPMorgan Chase started the marketing campaign in November. Until now it has largely consisted of advertisements and a link on the company's home page.
