Dimon and Gorman’s return to the Houses of Morgan


Mark Baker
Published on:

After brief illnesses, JPMorgan’s Jamie Dimon and Morgan Stanley’s James Gorman were back on form in this month’s earnings calls.



The US bank earnings reporting season would be a poorer place without the involvement of Jamie Dimon and James Gorman, the chief executives of the two Houses of Morgan. And so, JPMorgan CFO Jen Piepszak was surely speaking for more than just her colleagues when she told analysts at the start of her first-quarter earnings call on April 14 that "we're just thrilled that he is back".

Dimon, 64, had had emergency heart surgery in March. Gorman, 61, had tested positive for Covid-19 in the middle of the month, but avoided serious symptoms and was able to work from isolation at home. He circulated a video to staff in early April telling them he had recovered.

By earnings time, both were fighting fit.

Gorman always kicks off Morgan Stanley's presentation before handing over to CFO Jon Pruzan. At JPMorgan Piepszak presents the prepared remarks alone, Dimon usually sitting with the quiet menace of a shaken can of soda, waiting for the moment to burst into the Q&A.

Dimon does a great line in bluster, heaping words upon words until his audience succumbs without noticing he may have forgotten where his sentence began.


James Gorman,
Morgan Stanley

Gorman is different. His thing is dry wit – and a knack for cutting to the chase in language that everyone can understand. The mood in this earnings round was understandably sombre; quips were not the order of the day. But he still hit the mark.

How bad had things been? "Boy, it was an absolute crisis." "We're in a wild period." "A CEO who stands by their short-term targets that were set right before this virus hit, I don't know what planet they're on."

Many bank leaders are doing a decent job right now of acknowledging the human toll of the coronavirus while also trying to navigate the crisis as well as possible for shareholders. And while Gorman never lost sight of the macro level, he was also compelling on the micro.

The decision to guarantee jobs this year for all staff was the easiest he had ever made, he said, and hundreds of people had written to him about it. One was a woman working in a support function at the bank. After finding out one evening that her husband had lost his job at the small business where he worked, she came in the next morning to the email telling her that jobs at the bank were secure.

"She was just overwhelmed."

Over at JPMorgan, Dimon was thinking about how Americans would get back to work. Some 180,000 of his bank's staff were now working from home – "and quite effectively", according to his letter to shareholders this year.

But he dismissed talk of a rapid return to workplaces for much of the country: "It won't be May. We are talking about June, July, August, something like that."


Away from coronavirus, he was back on traditional form. Dimon so reliably runs through his bêtes noires that it's sometimes tempting to imagine he is ticking them off a list. This time he didn't have an opportunity to get stuck into the poor state of US airports or bridges, but regulations got their traditional treatment.


Jamie Dimon,

"We're adults," he told the analysts more than once. "We know that if the economy gets worse, we'll bear additional loss, but we do forecast all of that, so we know we can handle really, really adverse consequences."

But then the regulations. Even though the bank would have $200 billion in capital and $1 trillion in liquidity, "constraints like SLR and G-Sifi" would start to kick in as the bank's CET1 levels dropped.

If only it wasn't for those pesky regulations! Don't even get him started on this year's shiny new current expected credit losses regulations.

Too late: the analysts had wanted more CECL colour on the bank's fourth-quarter earnings call in January, and this time around they wanted to know how the current crisis would feed into the outlook assessments that the bank must plug into its lifetime-of-loan loss models.

This was too much. The bank's 10-Q quarterly filing would have various assumptions laid out in it, he said, and this was precisely one of the problems with CECL.

"We’re going to spend all day on CECL, which was $4 billion and it's kind of a drop in the bucket. But it's a lot of data. It's like all the data we did after the last crisis we gave you on level three [assets], and all these assumptions and stuff like that.

"No one ever looks at it anymore."