Jamie Dimon, the chief executive of JPMorgan Chase, has reflected in his annual shareholder letter on a year that was marked by the bank pulling out its checkbook to mend frayed relationships with the federal government â€" a reconciliation that has already cost around $20 billion.
In his letter on Wednesday, Mr. Dimon emphasized that despite those payouts â€" in fact, because of the “constant and intense pressure†â€" he was proud of JPMorgan and its “enduring resolve and resiliency.â€
He pointed to the $17.9 billion in annual profit, along with “strong performance†throughout the bank even though legal costs weighed on the bank’s bottom line.
Hashing out those settlements while trying to reduce risks throughout JPMorgan, Mr. Dimon said, proved to be a kind-of high-wire act. He said the balance was “the most painful, and nerve-racking experience that I have ever dealt with professionally.â€
Mr. Dimon took on a critical role in negotiating both the bank’s $13 billion settlement with a range of government authorities over its sale of mortgage-backed securities in the run up to the financial crisis. He also played an instrumental role in reaching a $2 billion pact over accusations that the bank failed to sound sufficient alarms about fraud surrounding Bernard L. Madoff’s Ponzi scheme.
Just hours before the Justice Department intended to announce civil charges against JPMorgan in its sale of mortgage investments in September, Mr. Dimon personally reached out to Attorney General Eric. H. Holder Jr., a move that helped avert a lawsuit and eventually led to the deal.
Still, in his letter, Mr. Dimon drew a stark distinction between the legal problems that buffeted JPMorgan and the continued strength of the bank. In fact, he said the last year was “A Tale of Two Cities,†referring to the novel by Charles Dickens.
Looking back on the year, Mr. Dimon said: “We came through it scarred but strengthened â€" steadfast in our commitment to do the best we can.â€
Among the highlights that were omitted from the headlines, Mr. Dimon said, were the bank’s ability to raise “$2.1 trillion for our clients†and its ability to provide $19 billion in credit to small businesses. Mr. Dimon also discussed the bank’s consumer businesses and its deposit growth.
Reiterating his commitment to bolstering the controls, Mr. Dimon said that since 2012, JPMorgan has hired an additional 13,000 employees to handle regulatory issues and compliance. In addition to the broader controls, Mr. Dimon noted that JPMorgan plans to dedicate around 8,000 staff to strengthen the bank’s fortifications against money laundering.
Mr. Dimon, received $20 million in compensation for 2013, a paycheck that signaled the board’s steadfast support of the 58-year-old executive and his leadership of the bank.
