Costs at the top US banks jumped more than $6.6bn, or 10 per cent, in the most recent quarter compared with the same period of last year as executives paid up for talent and technology to fortify their businesses against increasing competition from nearly every angle.
The increase in spending at JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, and Citigroup surprised analysts. Many had predicted that banks’ expenses would fall modestly this year as the extra costs associated with doing business during the pandemic faded away.
However, on a series of conference calls this week to discuss quarterly earnings, executives forecast higher annual expenses due to pay increases for bankers and bigger investments in technology and marketing.
“There’s a nervousness among investors that this is the cost of doing business to keep clients from bleeding to fintechs,” said Autonomous Research bank analyst…