JPMorgan announced Tuesday that it will boost wages, open new branches and hire thousands of new workers, citing improved economic performance and sweeping changes to the U.S. tax code.
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Wages will rise to between $15 and $18 an hour from a range of $12 to $16.50 an hour, impacting 22,000 employees, the bank said. Chase will also open 400 new branches and hire 4,000 people in its new U.S. markets, housing and small business divisions. Loans to customers seeking "affordable" homes will rise by 25 percent to $50 billion and the bank will boost philanthropy by 40 percent, to $1.75 billion over the next five years.
While JPMorgan Chase is the nation's largest bank by deposits and assets, its branch network is only found in 23 states and it does not serve large markets such as Washington, D.C. or Boston. A major branch expansion will likely include going into these markets. The branch expansion will take place over the next five years in up to 20 new markets, the company said.
A bank adding branches is somewhat notable. Most banks have been closing or consolidating branches, as more of their customers migrate to digital-only banking and rarely step foot inside a branch. Even JPMorgan has closed or consolidated branches since the financial crisis. But it is difficult for a bank to break into new geographic markets without at least a handful of branches, particularly competitive metropolitan markets.
The bank also said, as an additional benefit to existing employees, it will reduce medical plan deductibles by $750 per year for employees making less than $60,000.
JPMorgan, like the other major banks, expects to benefit heavily from the new tax law. It now expects its effective tax rate to be 20 percent, compared to the roughly 30 percent tax rate it was paying previously.
"Having a healthy, strong company allows us to make these long-term, sustainable investments," said Chariman and CEO Jamie Dimon, "We are excited about further investing in our outstanding workforce and expanding into new U.S. markets."
The bank also plans to expand its small business lending division. It will add 500 new bankers focused on small business lending and will increase small business lending to $4 billion over the next three years.
The company recently reported a 37 percent drop in fourth-quarter profit, mainly on a charge related to the recent changes in the tax code changes. Excluding the $2.4 billion charge, JPMorgan earned $6.7 billion in the quarter, and Dimon called the new tax bill a "significant positive for the country."