JPMorgan Chase said Tuesday that it will make a $20 billion, five-year investment in its U.S. business, including raising some wages and opening new branches, after massive changes to the corporate tax code that are expected to save the bank $4 billion this year.
The New York bank, the largest in the United States by assets, is the latest corporation to lay out its plans to spend a windfall from changes to the tax code. JPMorgan also attributed the move to a friendlier regulatory environment, a key focus of the Trump administration.
“Having a healthy, strong company allows us to make these long-term, sustainable investments,” JPMorgan chief executive Jamie Dimon said in a statement. As the head of the powerful Business Roundtable, Dimon emerged as one of the most vocal and visible CEOs pushing for changes to the corporate tax code last year. The lobbying group for American chief executives quadrupled spending in the last three months of the year to more than $17 million as the tax bill made its way through Congress, according to media reports.
Large banks are expected to be among the biggest beneficiaries of the broad changes to the tax code. JPMorgan’s effective tax rate is expected to fall to 19 percent this year from 35 percent previously and Dimon has said the bank would save nearly $4 billion this year because of the new law.
JPMorgan said it would spend some of its windfall increasing wages for 22,0000 of its more than 240,000 employees by an average of 10 percent. Wages for these employees will rise from between $12 to $16.50 an hour to about $15 to $18 an hour starting in February, the bank said. It also said it would open 400 new branches that will employ about 3,000 people.
The bank said its $20 billion investment also will include increasing its small business lending nearly 20 percent, or $4 billion, over three years, and increase loans to customers seeking affordable homes by 25 percent. JPMorgan also said it will spend more on philanthropy, making a total investment of $1.75 billion over five years.
The $20 billion investment nearly equals the more than $25 billion in profit the bank, which has more than $2 trillion in assets, made last year.