(Reuters) - JPMorgan Chase & Co (JPM.N) is considering shrinking some of its trading businesses as it expects a new federal reserve proposal to make these businesses less profitable, Bloomberg reported.
JPMorgan is reviewing the size of some of its capital-intensive units such as interest-rates trading, prime brokerage and delta-one equities desk, Daniel Pinto, chief executive of JPMorgan’s corporate and investment bank, told Bloomberg in an interview.
JPMorgan isn’t necessarily looking at exiting any businesses or significantly cutting jobs, Bloomberg quoted Pinto as saying.
In December, the U.S. Federal Reserve proposed that eight of the largest U.S. banks will need to hold an extra capital cushion and said the firms will need more equity if they rely on risky types of debt.
Fed officials estimated the banks would face a surcharge of between 1 and 4.5 percent of risk-weighted assets. Fed Vice Chairman Stanley Fischer said at the time that JPMorgan would need more than $20 billion of additional capital to comply.
Pinto is expected to discuss his review at JPMorgan’s investor day on Feb. 24, Bloomberg reported.
JPMorgan was not immediately available for comment.
Reporting by Zara Mascarenhas in Bengaluru; Editing by Maju Samuel