JPMorgan raises profit goal on lower taxes, higher rates

NEW YORK, Feb 27 (Reuters): JPMorgan Chase & Co raised its key profit goal on Tuesday, and said lower taxes and higher interest rates could help increase its annual pretax net income by up to 17.5 per cent in three years.

The bank boosted its target for return on tangible common equity (ROTCE), a widely watched profit measure, to 17 per cent from 15 per cent, according to a presentation on its website ahead of its 10th annual investor day conference.

Several stock analysts had expected the target to be raised to at least 16 per cent because the recent changes in federal taxes would likely add about two per cent points of return.

JPMorgan's ROTCE in 2017 was 13 per cent, excluding one-time accounting adjustments for the tax law change.

The slides showed that JPMorgan expects benefit from changes in the US tax law to add 3.0 per centage points to return on tangible common equity. The gains included improvements in return on equity in all four of the company's businesses.

The presentation included an earnings simulation that showed annual pretax net income would rise to $44 billion to $47 billion over the next three years.