JP Morgan Chase, the US banking giant, enjoyed its most profitable quarter ever as soaring investment banking fee income helped generate net income of $5.6bn (£3.4bn) for the first three months of 2011.
The company has hired 1,500 new investment bankers around the world in the past 12 months, and increased average pay by 6 per cent. Adding together salaries, benefits and money set aside for end-of-year bonuses, the average JP Morgan investment banker has been paid £25,500 per month since the start of the year.
The investment banking division contributed profits of $2.4bn to the company's overall profits, while other businesses – from credit card lending to asset management – continued to slowly heal from the economic crisis. The bank, which is the largest in the US, continued to suffer losses on its portfolio of mortgages as American borrowers struggled to avoid foreclosure, and the company's retail banking division recorded an overall loss. JP Morgan chief executive, Jamie Dimon, hailed a 41 per cent jump in fees from advising investment banking clients, and a 33 per cent jump in underwriting fees on debt issues by corporate clients.
But he stepped up his warnings that US regulators ought not to follow their counterparts in other countries, including potentially now in the UK, by imposing higher capital requirements on banks. The UK's Independent Commission on Banking recommended that banks hold capital to cover 10 per cent of their loans; the Bank for International Settlements has proposed a 7 per cent figure that Mr Dimon said is plenty.
"Just because the UK does it and Switzerland does it, doesn't mean that the US has to do it," he said.
JP Morgan could relocate future investment away from countries that have significantly higher capital requirements, he said.