FirstFT: JPMorgan plans ‘unparalleled’ spending spree

Good morning.

Our top news today is that JPMorgan Chase plans to spend an “unparalleled” $15.7 billion this year on new initiatives that will include hiring, marketing and investing in technology. Planned spending is $2 billion more than the Bank spent last year.

“Our competitors have not invested and cannot invest at the levels we are doing. These investments represent an important future operating lever for years to come,” said Marian Lake, co-president of the bank’s consumer and community division. Its business unit is expected to spend $7.9 billion on new investments, an increase of $800. million dollars for the year 2022.

The bank’s announcement at Investor Day on Monday is another sign of the growing bifurcation between larger US banks and smaller lenders that have come under pressure this year.

JPMorgan also raised its forecast for net interest income by $3 billion following the First Republic deal. NII is the difference between what banks pay on deposits and what they earn on loans and other assets.

This is what I’m seeing today:

• Russian-Chinese Business Forum: Russian Prime Minister Mikhail Mishustin will lead a high-ranking delegation to the Russia-China Business Forum in Shanghai. The event is expected to underline China’s growing support for President Vladimir Putin after Western countries passed sweeping sanctions in response to the Ukraine war.

• EU support for Ukraine: The EU’s Foreign Affairs Council defense ministers meet to discuss the bloc’s support for Ukraine. The ministers will also take part in an informal exchange with NATO Secretary General Jens Stoltenberg during a working lunch.

• economic data: S&P Global/CIPS will release its monthly Purchasing Managers’ Index (PMI), which tracks the economic direction of the service and manufacturing sectors in Japan, France, Germany, the United States, Australia, the United Kingdom, and the Eurozone.

Who will win the technology war between the United States and China? Join FT and Nikkei Asia journalists for a Subscriber-exclusive webinar on May 25th And put your questions to the committee.

Five other important stories

1. South Korea points out that chipmakers can fill the gap After China banned US chipmaker Micron, saying it was up to Samsung and SK Hynix to decide whether to expand their business. Last month, the White House asked South Korea to urge chipmakers to refrain from increasing sales to China if Beijing restricts the sale of Micron products.

2. The village of “liberating” pro-Ukrainian fighters in the Russian region of Belgorod. A group of Russian anti-Kremlin militants stormed the region bordering Ukraine on Monday. The Kremlin promised to “destroy” the group, and videos released by Belgorod residents showed attack helicopters flying over homes in the area. Kiev denies direct involvement but says the militants are seeking to create a “security zone” to protect Ukrainians.

3. Mizuho agrees to a $550 million Greenhill investment bank deal, The bet is that the ailing company can help launch its American ambitions. Mizuho, ​​one of Japan’s largest financial institutions, will pay Greenhill $15 a share, more than double Friday’s closing share price.

4. TikTok is suing the state of Montana over its first US ban. The company, which is owned by China’s ByteDance, has filed a lawsuit arguing that a state ban on the app over national security concerns violates First Amendment rights and US rules on foreign and interstate trade.

5. The BBC has been accused of defaming Indian Prime Minister Narendra Modi in the Delhi case. The suit alleged that the British broadcaster’s latest documentary series “casts a shadow over the country’s reputation” and makes false and defamatory suggestions about the Indian government. The backlash against the BBC comes at a sensitive time in India-UK relations.

Adults read

A class of chemicals known as PFAS (per- and polyfluoroalkyl substances) are essential to the production of everything from smartphones to firefighter suits—but especially to microchips. However, these “forever chemicals” also have the potential to cause significant health and environmental impacts.

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Earnings at Goldman Sachs, Morgan Stanley and a host of other Western banks in China fell sharply last year, as the Covid-19 shutdown and geopolitical tensions dampened hopes that their operations in the country might finally start to be profitable. JPMorgan and UBS were the only two among a group of seven Western investment banks whose earnings rose.

The lackluster performance is a reversal from 2021, a record year for investment banks globally, when six of the seven banks turned a profit on their mainland operations after Beijing allowed them to start taking full ownership of units for the first time after a commercial deal. with us.

Take a break from the news

Democratic presidential candidate Hillary Clinton delivered stark assessments on Russia’s invasion of Ukraine, US-China relations, and US President Joe Biden’s re-election prospects during an appearance at FT Weekend in Washington over the weekend.

Additional contributions from Gordon Smith and Tee Zhuo