If earnings week showed anything, it's that profit among the biggest banks took a role of lesser concern.
Without that to talk about, it left room for a number of subplots to bubble into the conversation.
For JPMorgan, that B-narrative may have been the threat of still-developing offerings. ... No, not crypto. Rather, buy-now-pay-later (BNPL).
"When we talk about expenses, we will spend whatever we have to spend to compete with all these folks in our space," CEO Jamie Dimon said of BNPL growth on Wednesday's earnings call, according to Business Insider.
The bank's relatively new CFO, Jeremy Barnum, took a more light-hearted tone on the subject.
"For any given thing that's emerging, you can easily convince yourself that it's kind of not a threat. It's funny how layaway is back in the e-commerce checkout lane," Barnum said, adding the bank is attentive to the segment even though BNPL transaction volume accounts for a relatively slight proportion of the market. "We're in a moment of taking all types of potential disruptions, especially fintech-y type disruptions, quite seriously."
Fintech, to be sure, is where JPMorgan is expanding this year. Barred by regulators from buying another deposit-taking institution, the nation's largest bank has looked to adjacent arenas to grow in the U.S. In the past six weeks, that has meant buying a college financial planning platform and a restaurant platform that owns the Zagat guidebook.
On crypto, Dimon has sounded like the Jamie of old. "I personally think that Bitcoin is worthless," he told the Institute of International Finance last week, according to CNBC.
But "our clients are adults. They disagree. That's what makes markets," he added. "So, if they want to have access to buy yourself Bitcoin, we can't custody it but we can give them legitimate, as clean as possible, access."
Dimon in 2017 called Bitcoin "a fraud" and said he would fire "in a second" anyone at JPMorgan found to be trading in the digital currency.
"You can't have a business where people can invent a currency out of thin air and think that people who are buying it are really smart," he added, according to The Guardian.
Morgan Stanley CEO James Gorman, on his bank's earnings call Thursday, signaled his view is markedly less skeptical. "I don't think crypto is a fad. I don't think it's going to go away," he said, according to Bloomberg. "I don't know what the value of Bitcoin should or shouldn't be. But these things aren't going away, and the blockchain technology supporting it is obviously very real and powerful."
PNC CEO Bill Demchak and Citi CEO Jane Fraser, meanwhile, are taking a middle tack on the matter.
"I don't have to opine on whether I think that's a good investment or a bad investment," Demchak said, according to American Banker, adding that 10% to 15% of the bank's clients are moving money in and out of crypto exchanges. "There's the risk, I think, that people are aware of with certain of the stablecoins having, let's call it, suspicious collateral behind them."
Fraser — by the same, um, token — said her bank is "fairly cautious around crypto."
"I am frankly much more excited about the technologies behind crypto than some of the products themselves," she said Thursday, according to Bloomberg.
Pushback on Citi, Wells
Elsewhere, Citi may be trying to show it hasn't gone completely soft. Mark Mason, the bank's CFO, noted during the bank's Thursday call that it has invited staff back to 21 offices in North America. The bank took up the role of standard-bearer for hybrid work in March, when Fraser announced most Citi employees would work as many as two days a week remotely after the COVID-19 pandemic subsides.
At least one analyst last week sought to bring focus to another of the bank's efforts — a disclosure, filed in August, that three Citi executives — Mason, Institutional Clients Group Chief Paco Ybarra and tech chief Mike Whitaker — would be in line for bonuses of up to $5 million each if they meet goals in overhauling the bank's internal controls and risk oversight — provided the bank's stock hits certain targets.
The problem, according to Wells Fargo analyst Mike Mayo, is the targets, in the filing were left vague.
"That's like charging us for dinner before we know if we're getting hot dogs or caviar," Mayo told clients, according to Bloomberg.
Mayo isn't the only skeptic. JPMorgan analyst Vivek Juneja pressed Wells Fargo CEO Charlie Scharf when he said he remains "confident" the bank would continue righting itself over several years, in the regulatory sense.
Eyeing a more specific timeline, Juneja asked, "What do you need to do differently, especially as a management team?"
Kenneth Leon, director of equity research at CFRA, told American Banker the bank is "beginning to change culture, they have senior leaders that know what they're doing. … Now they've got to spread the word and get execution from middle management. That takes time."
Too close for comfort?
Not every subplot has such heft. But perhaps when a bank is reporting revenue over nine months that goes beyond what it generally does in 12 — vis-a-vis Goldman Sachs, it can be afforded frivolity.
The bank has apparently moved some senior executives from offices on the 41st floor of its New York headquarters to a grid of cubicles on the 12th floor — so they'd be closer to the 11th-floor "Sky Lobby" that's intended to serve as a hub of activity for the rank and file.
"There is a natural 'buzz' there, and I want our leadership team to be part of it," CEO David Solomon said in a memo, according to The New York Post.
The Sky Lobby cost more than $10 million to build out, a source told the Post. And the idea is that with executives one floor away rather than 30, collaboration would among the bank's staff would come more easily.
"You didn't find a lot of enthusiastic support for the idea," the Post's source said.
"Most people have just ended up working from their conference rooms," said another.