JPMorgan to hike pay, hire more in $20-bn investment push after US tax law

It will also increase small biz lending by $4 bn and increase loans to customers seeking affordable homes by 25% to $50 bn

JPMorgan Chase & Co unveiled a $20 billion investment plan on Tuesday to increase wages, hire more, open new branches and expand its business as it takes advantage of sweeping changes to the US tax law and improved regulatory environment.

The bank joined several other US corporations that have already announced spending plans as the new tax law is expected to kick-start economic growth in part by offering new incentives for capital investment.

As part of the five-year plan, the largest US bank by assets will increase wages for 22,000 employees by an average of 10 percent, ranging between $15 and $18 per hour, hire 4,000 employees and open up to 400 Chase branches in new cities.

JPMorgan will also increase small business lending by $4 billion and increase loans to customers seeking affordable homes by 25 percent to $50 billion.

Analysts expect JPMorgan to save about $4 billion a year on taxes because of the new federal tax law, but have been worried that banks will quickly "compete away" the savings from the new tax law in a bid to take business from one another.

Chief Executive Jamie Dimon has acknowledged that some of that will happen, but to varying degrees and at different rates in the bank's assorted business lines.

Dimon had set the stage for Tuesday's announcement on its post-earning conference call on January 12, where he said new spending would eat into the bank's savings from lower taxes, but "will enhance our growth in the future."

"It isn't like a giveaway," he had then said.

In a statement on Tuesday, Dimon said: "Having a healthy, strong company allows us to make these long-term, sustainable investments."

The bank will also increase community-based philanthropic investments by 40 per cent to $1.75 billion over five years, it said.

JPMorgan's shares were nearly flat at $114.15 in premarket trading.