J.P. Morgan Chase, the biggest U.S. bank by assets, said it expected 2017 expenses to rise about 3.4% as it spends more on technology and in signing up new credit card accounts.
Total adjusted expenses for 2017 are expected to be about $58 billion, up from $56.1 billion in 2016, according to slides posted on the company’s website as part of the bank’s investors day on Tuesday.
Some investors expecting U.S. banks’ profits to surge have been counting on the lenders to hold expenses fairly steady so that more of each additional dollar of revenue goes to the bottom line.
For its long-term targets, the bank maintained its return on tangible common equity goal of about 15%.
J.P. Morgan delivered a 13% return in 2016, about the same as the two prior years.
Analyst Jason Goldberg of Barclays said in a report in advance of the meeting that he expected executives to show more clearly than last year how they will reach the return target.
As recently as 2014, J.P. Morgan had targeted a return in the range of 15%-to-16%, but then cut back in the face of higher capital and liquidity requirements from regulators.
The return target disclosed on Tuesday was based on roughly the same capital base, as measured by regulatory standards, and common equity tier 1 ratio.
J.P. Morgan (jpm) said it expected first-quarter markets revenue to grow modestly over a year earlier.
The lender’s shares were down nearly 1% at $89.61 in premarket trading. They had risen about 29% since the U.S. presidential election on Nov. 8.