Even JPMorgan Chase & Co., a Wall Street winner since the financial crisis and now the world’s biggest investment bank, is considering shrinking some trading businesses because new rules make them less profitable.
The firm is reviewing the size of capital-intensive units such as interest-rates trading, prime brokerage and its so-called delta-one equities desk, according to Daniel Pinto, chief executive officer of JPMorgan’s corporate and investment bank. Pinto isn’t necessarily looking to exit any businesses or make significant job cuts, he said in an interview.
Global investment banks such as Credit Suisse Group AG and Morgan Stanley have scaled back fixed-income trading, and Deutsche Bank AG is undertaking a review of its strategy as rules meant to make the financial system safer reduce the amount of leverage banks can use to boost returns from certain activities. JPMorgan has gained market share in trading since the financial crisis as rivals retreated.