JPMorgan Chase pledged on Tuesday to facilitate $200 billion in environmental and economic development deals and will pull back from advising and lending to the coal-mining industry.
The new targets, disclosed in presentations for the New York-based bank’s annual investor day, mark an expansion from previous sustainable financing goals. Apart from helping to fund new climate and economic inclusion projects around the world, the bank said it was taking new steps to accelerate the transition to clean energy.
On top of stepping back from advising companies that get most of their revenue from coal extraction, JPMorgan said it will put restrictions on financing new coal-fired power plants, phase out “credit exposure” to the industry by 2024 and will stop funding new oil and gas drilling projects in the Arctic.
“This new commitment is intended to address a broader set of challenges in the developing world and developed countries where social and economic development gaps persist,” the bank said in a statement.
Despite the announcement, dozens of environmental activists protested outside the bank’s headquarters ahead of the annual meeting. Even after retrenching from some of its relationships, the bank will still be one of the major bankers to the fossil-fuel industry overall.
Under CEO Jamie Dimon, JPMorgan has held annual investor meetings to update stakeholders on performance targets, market conditions and areas of opportunity. The bank on Tuesday reiterated guidance given at last year’s investor meeting, saying that the company would target an approximate 17% return on tangible equity and 55% efficiency ratio in the medium term. Given the relative lack of news, the bank said it may no longer hold investor meetings every year in the future.
2020 forecast
JPMorgan said it remained alert to risks that customers would begin to default on their loans at a higher rate than the past few years, which have seen relatively low loss rates. It said that growth in card lending will result in the bank building reserves for loan losses this year.
The company said it expected to generate about as much net interest income in 2020 as it did last year, when it made $57.8 billion. It will produce at least $60 billion in net interest income in 2021 if its assumptions on growth in deposits and credit card balances prove accurate.
Dimon also typically takes questions from analysts and investors in attendance. He may be asked about the prospects for further financial-industry mergers after Morgan Stanley announced a $13 billion deal to purchase E-Trade last week and Visa said last month it was buying Plaid for $5.3 billion.
After announcing a plan to expand its branch presence to reach nearly all Americans last year, JPMorgan, the largest U.S. bank by assets, may be preparing to push into new retail markets. It is planning to launch a digital bank in the U.K. by year-end, Sky News reported recently.
Shares of JPMorgan were down 1.2% Tuesday morning. They had climbed 26% in the past 12 months.