NEW YORK: JPMorgan Chase today unveiled plans to eliminate hundreds of retail branches and some USD 100 billion in deposits as it announced nearly USD 5 billion in cost cuts in the next three years.
The biggest US bank by assets, JPMorgan projected USD 2.8 billion in expense reductions in its corporate and investment bank division through 2017 and another USD 2.0 billion in expense cuts in its consumer and community banking segment.
The move comes as large banks continue to face major challenges from regulators that have resulted in large legal settlements and raised the cost of riskier business lines.
JPMorgan said the rise of digital banking permits it to cut its physical footprint, enabling fewer retail locations and smaller staffs at those that remain.
The bank will cut its branch count by about 300 through the end of 2016, according to slides it presented ahead of an investor day.
JPMorgan's corporate and investment banking segment plans USD 2.8 billion in savings through 2017, with the bulk, USD 1.5 billion, coming from business simplification.
The bank expects to reduce the amount of firm-wide non-deposits by up to USD 100 billion by the end of this year, according to a slide.
JPMorgan plans to charge hedge funds and other institutional clients to hold some deposits, Bloomberg News reported. The move is a response to new regulations that require JPMorgan to hold additional capital for these types of deposits.
JPMorgan Chase rose 1.9 per cent to USD 60.50 in pre-market trade.