JPMorgan Trims LatAm Private Banking Staff
JPMorgan has extended its early spring cleaning to its private bank, where it laid off at least 15 employees who cover clients in Latin America over the past two weeks. At least one was a senior banker who had been with the banking giant for 20 years, according to two sources.
It was “a firing spree,” a former banker at the Latin American unit, which covers international clients from offices in the U.S., told us. He said several associates who graduated from top business schools were among the layoffs. A JPMorgan spokeswoman declined to comment on the firings and would not say how many people overall work at the Latin American private bank.
The cuts were not a total surprise because JP Morgan had been signaling through compensation that the Latin American group would suffer, said one source, who left JPM more than a year ago.
“[B]onuses were said to be flat to down on average,” he wrote in an email. “A very few lucky heads collected a very slightly improved amount, in comparison from last year.”
A JP Morgan private banker in the Midwest confirmed the layoffs.“I’d be watching for…downsizing around the private bank throughout 2016,” he said. “Just my gut feeling.”
Large banks globally have been wielding an ax in the face of more austere regulatory oversight, heightened capital requirements and sluggish revenue and profit growth. Wealth management has largely evaded the major cuts because it is not a capital-intensive area, but Bank of America’s Merrill Lynch and other firms have been restructuring in Latin America because of heightened anti-money-laundering scrutiny.
The layoffs at JP Morgan were concentrated among lower-tier bankers who were not meeting revenue expectations, the sources said.
JPMorgan’s private banking business includes a private wealth advisor group for people with a minimum of $5 million of investable assets. Private bankers are compensated with a core base salary and bonus supplement rather than with the production-centered model that covers stockbrokers at the mass-affluent-directed JPMorgan Chase Private Client unit and at the JP Morgan Securities unit housing legacy Bear Stearns advisors.