FirstFT: US banks increase their salary and technology spending

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The costs of major U.S. banks jumped by more than $ 6.6 billion in the last quarter, as the intensifying battle for talent and the growing threat from new fintech rivals forced executives to rise. their expenses.

The 10 percent increase in costs over last year at JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup surprised analysts. Many had predicted that spending would decline modestly this year as the additional expenses associated with doing business during the pandemic wore off.

However, in a series of conference calls to discuss quarterly earnings, executives forecast higher annual expenses due to salary increases for bankers and larger investments in technology and marketing.

The increase in spending represents a change from how banks reacted to the last financial crisis, when many relied on cost cuts to boost profits. But the stimulus packages have helped banks avoid the wave of pandemic-related loan losses that executives expected, meaning they have extra cash to spend.

Brian Foran, Banking Analyst at Autonomous Research, said:

“There is nervousness among investors that it is the cost of doing business to keep customers from bleeding fintechs.”

Five other articles in the news

1. Americans who helped Carlos Ghosn flee Japan sentenced to prison Michael Taylor, a 60-year-old former Green Beret, and his son Peter, 28, who orchestrated Carlos Ghosn’s elaborate escape from Japan, were sentenced by a Tokyo court to two years and 20 months in prison, respectively .

  • Read more: Collision course is among the first books to attempt to aptly relate and contextualize this remarkable episode, said our Asian Affairs Editor-in-Chief Leo Lewis.

2. Zoom buys cloud call center company for nearly $ 15 billion The video conferencing start-up whose services became globally popular during the coronavirus pandemic agreed to buy Five9, a cloud-based software provider, in its first major acquisition.

3. Opec + signs agreement to increase oil production OPEC and its allies reached an agreement over the weekend to increase oil production in response to soaring prices. The deal represents a victory for Abu Dhabi, which threatened to derail talks earlier this month. Subscribe to our Energy Sources Information Bulletin for the latest energy industry news.

  • US gas exporters facing EU methane restrictions U.S. oil and gas exporters have been warned that they face a squeeze European anti-pollution rules despite the exclusion of energy from a series of climate proposals introduced in Brussels last week.

4. Democrats support Powell’s second term Democrats are leaving the door open for Federal Reserve Chairman Jay Powell for another four-year term when his current term expires in February, as deliberations intensify within the Biden administration over key appointments to the US central bank.

5. Probe: Spyware Used to Hack Journalists, Activists, and Executives Spyware licensed from Israeli company NSO Group was used to target smartphones owned by 37 journalists, human rights activists and other figures, according to an investigation released yesterday.

Coronavirus digest

  • the we is experiencing a “pandemic of the unvaccinated,” warned the head of the country’s main public health agency, as new cases of the coronavirus jumped 70% last week.

  • Three of Brittany Most cabinet ministers – including Prime Minister Boris Johnson – will self-isolate on so-called Freedom Day in England today, when the country lifts its last pandemic restrictions.

  • the Delta variant takes a heavy toll on dozens of developing countries, where immunization levels are insufficient to prevent an upsurge.

  • the Tokyo Olympics suffered a number of delays controversies, including a suspected rape, bullying scandal and a missing weightlifter – as well as 55 cases of the coronavirus this month.

Follow our coronavirus live Blog and Register now for our Coronavirus Business Update newsletter for more information on Covid-19.

The day to come

Earnings IBM, which recently unveiled a management reshuffle, is releasing its second quarter results today after the US markets close.

What else do we read

Robotaxis: a “moonshot” solution for complete automation? Since Google launched its self-driving car project in 2009, the biggest question for the technology has been: can it be safe enough to be deployed on a large scale? Now the risk for robotaxis is not whether full autonomy can be successful, but whether they can be inexpensive enough to make a business case.

Inflationary fears are exaggerated The first signs of price increases reflect more of a predictable increase in animal spirits after the lockdown than any long-term trend, writes Rana Foroohar.

  • Read more: Don’t worry, says Kenneth Rogoff, professor of economics and public policy at Harvard University, a little inflation isn’t a bad thing.

How shortages fueled protests in Cuba The pandemic has devastated the tourism industry and reduced the state’s ability to finance food imports, leading to higher prices and thousands of people taking to the streets to protest. While the government has been successful in easing the unrest, it is not yet clear how long it will be able to maintain control with a crumbling economy.

Floods in Germany put climate at the heart of elections Just over two months before election day, the devastating floods that swept through western Germany, killing at least 140 people, catapulted climate change to the heart of the country’s election campaign.

Poor workers have nowhere to hide Do mediocre workers thrive more when they work from home or when they are in the office? While some employers doubt the motivations of staff who prefer remote work, others say it’s easier to identify which staff adds the most value when a team works remotely, writes Pilita Clark.

Property

Five of the world’s best homes for sale with period features From an eight-bedroom villa in Mexico City to a five-bedroom family home in Connecticut built in 1744, these top notch properties have eye-catching original architecture and interiors.

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