JPMorgan’s fourth quarter results are out, and if you’re a fixed income trader they look pretty good.
Revenues from fixed income currencies and commodities trading (FICC) at the bank were up 10% year-on-year in 2022 and 12% year-on-year in the fourth quarter. While banks like Goldman Sachs are expected to cut trading bonuses this year, JPMorgan indicated that bonuses for its own fixed income traders could be up: in the commentary accompanying its presentation, the bank said costs had risen partly by virtue of higher “revenue related compensation” in the corporate and investment bank in 2022. This could refer to higher bonuses for payments and lending professionals, whose revenues rose 18% and 28% respectively, but in the investment bank it could refer only to fixed income professionals. Revenues in all other divisions fell in 2022.
JPMorgan revenue change by business, 2022 vs. 2021
Within fixed income, JPMorgan said its rates, currencies and emerging markets professionals had the strongest fourth quarter, while securitized products revenues foundered.
The bank’s macro traders will need to hope their strong performance was remembered when bonus pools were allocated. Across the CIB as a whole, average pay fell to $178k in 2022, down from $194k in 2021. There were signs, however, that the bank topped up the bonus pool in Q4, when average compensation per head rose to $42k, up from $35k in Q4 ’21. Compensation expenses increased from 25% of revenues in ’21 to 29% in ’22 as a result.
Despite the challenging year, JPM kept hiring. Headcount in the CIB was up 9%, or nearly 6,000 people last year; 1,655 people were added in the final quarter. JPMorgan CEO Jamie Dimon said this week that the bank will keep hiring, even while rivals cut.
Sarah Butcher and Zeno Toulon – Read more on efinancialcareers.co.uk