JPMorgan Chase boss Jamie Dimon has labelled Wells Fargo "irresponsible" for announcing the departure of its chief executive without a replacement in place, in a rare public attack by a big US bank on a rival.
Wells Fargo announced the exit of Tim Sloan in March, after tussles with regulatorswho have been scrutinising the bank in the wake of a mis-selling scandal. Allen Parker, the bank's general counsel, took over on an interim basis and the bank has yet to announce a successor, whose appointment must also be vetted by the US Comptroller of the Currency.
"I think Tim Sloan was doing a good job," Dimon told Deutsche Bank's annual financials conference in New York. "I think it's not responsible for a company to have a CEO leave with no plan in place . . . I'd be surprised if regulators wanted that to happen because it's irresponsible . . . It's not the way to run the railroad."
Several former JPMorgan executives, including former chief operations officer Matt Zames, have been cited as potential successors even though Wells's largest shareholder, billionaire Warren Buffett, has urged the board to look beyond Wall Street for its next leader.
Departed Wells Fargo CEO Tim Sloan. Photo / Getty Images
A Wells Fargo spokeswoman declined to comment on Dimon's remarks, or on how the search for a new chief executive is progressing. The bank's shares are down almost 6 per cent since it announced Sloan was leaving.
Dimon, who runs America's biggest bank by assets, also warned that investment banking fees would be US$200 million ($305.6m) lower than some analysts had pencilled in for the second quarter. Two months into the quarter, he told the conference audience, "you have the wrong number for investment banking fees, it's going to be closer to US$1.7 billion".
By contrast, the bank reported investment banking fees of US$2.2b in the second quarter of last year. Dimon said JPMorgan had held its share in a market that is "a little bit lower".
The 63-year old added that JPMorgan's underlying second-quarter revenue would be "a couple of percentage points" lower relative to a year earlier in an "OK" environment compared with a "quite good" second quarter in 2018.
"I think it's not responsible for a company to have a CEO leave with no plan in place," Dimon said of Wells Fargo. Photo / AP
Dimon also stuck a more optimistic tone on the US economy. "It isn't like you have to have a recession . . . It might be we're in the last third [of the economic cycle] — that third could be five more years," he said.
Still, he warned that ongoing trade tensions had gone from "a skirmish to being far more important than that . . . You already see businesses trying to think about moving their supply lines and things like that."
Dimon repeated his criticism of what he called overregulation in the financial system, bemoaning the "mind numbing paperwork and bureaucracy that is sucking this country dry".
He also took aim at the "never-ending hyperventilation" on risks since the financial crisis, saying: "You bear risks in a bank . . . you know there's going to be a cycle."
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