If you can count on one banking CEO to be outspoken, chances are high that it is Jamie Dimon of J.P. Morgan Chase & Co. (NYSE: JPM). In his annual letter to shareholders, Dimon has come out signaling that record earnings could be far better under normalized situations and he is remaining vocal.
Jamie Dimon noted, “Your company earned a record $19.0 billion in 2011, up 9% from the record earnings of $17.4 billion in 2010. Our return on tangible equity for 2011 was 15% — the same as last year. Relative to our competitors and given the prevailing economic environment, this is a good result. On an absolute and static basis, we believe that our earnings should be $23 billion – $24 billion.”
The 38 page document talked about mortgage-related losses and he noted that the hostility toward the banking industry continues.
Jamie Dimon noted that the bank bought back $9 billion of stock and that it was recently granted permission to buy back up to $15 billion more during the remainder of 2012 while lifting the dividend from $1.00 per share to $1.20 per share on an annualized basis. While this was a good thing, here is why this dividend hike should have been taken as a disappointment by Wall Street and Main Street investors alike.
JON C. OGG