JPMorgan has been hiring. The bank today released its results for the fourth quarter and the full year of 2018, revealing that headcount in the corporate and investment bank (CIB) rose by 6% last year, or 3,300 people. Almost all the hiring happened in the third quarter, which suggests the bank bulked-up on graduate trainees who tend to join in the summer.
What were those trainees hired to do? A clue comes from today's figure for technology spending across the bank as a whole. Last year, JPM spent $8.8bn on technology, 14% more than in the previous year. In the past two years, JPMorgan's technology spending has risen nearly 30%. CEO Jamie Dimon said today that the bank accelerated its investment in technology in 2018. This follows a note to investors last April (where the bank curiously said it spends even more on technology than today's accounts show), in which both Dimon and Daniel Pinto, CEO of the corporate and investment bank (CIB), said technology spending and hiring was a priority.
A focus on graduate-level technology recruitment might be one reason why average pay per head at JPMorgan's corporate and investment bank remained static this year, at $188k. - Junior technologists aren't paid as much as front office bankers and won't push compensation up. Average compensation in the CIB plateaued in 2018 despite reports last week that JPMorgan was planning to increase the bonus pool for the corporate and investment bank by 3%.
If front office bonuses did indeed increase, today's results suggest some of JPMorgan's staff deserve a bigger increase than others.
As the chart below shows, JPMorgan's equities professionals, M&A professionals and equity capital markets bankers achieved strong revenue increases last year. Its fixed income currencies and commodities professionals did not (in the fourth quarter the bank said credit trading, rates trading, and commodities trading were all problematic and that emerging markets helped ease the pain.) JPMorgan's ECM bankers in particular out-performed Citi's, but it's M&A bankers had an exceptionally strong fourth quarter (revenues rose nearly 40%), which is likely to be fresh in the minds of those allocating bonuses for the year.
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