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Business

JPMorgan announces huge savings plan

JPMorgan has unveiled plans to save billions of dollars over the next few years by eliminating many of its retail branches. It's an attempt to offset higher costs involved in pursuing riskier business lines.

JPMorgan on Tuesday presented plans to do away with hundreds of its retail branches and eliminate $100 billion (88 billion euros) in deposits.

The biggest US lender by assets projected $2.8 billion in expense reductions in its corporate and investment bank division through 2017 and another $2.0 billion in cuts in its consumer and community banking segment.

Analysts viewed the move as a response to large banks now facing major challenges from regulators that have resulted in

large legal settlements

and raised the costs of running riskier business lines.

Getting leaner

JPMorgan said the rapid rise of online banking would enable it to cut its brick-and-mortar footprint and have fewer retail locations and smaller staffs at those that remained.

The bank said it would cut its branch count by about 300 until the end of 2016.

The US lender added it was planning to charge institutional clients such as hedge funds and foreign banks for holding some big deposits. It said the move was in response to new regulations requiring JPMorgan to hold additional capital for these types of deposits, but emphasized that private clients would not be affected by negative interest rates.

hg/sgb (AFP, dpa)

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