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Jamie Dimon: 'You have a golden age of banking'

JPMorgan Chase & Co.'s CEO says economic vigor, lower taxes, technology-driven innovation, healthy competition, deregulation and rising interest rates are melding together to create a uniquely prosperous era for banks.

"You have a golden age of banking," Jamie Dimon, chairman and CEO of the largest U.S. bank by assets, said June 1 at a conference hosted by Sanford C. Bernstein.

JPMorgan posted first-quarter net income of $8.7 billion, a record for the company, on revenue of more than $28.5 billion. The U.S. banking industry, from community lenders on up to JPMorgan and its megabank peers, also notched a record profit in first quarter on lower taxes and higher revenue. Banks, collectively, reported quarterly net income of $56 billion, up 27.5% from a year earlier, according to the Federal Deposit Insurance Corp.

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JPMorgan Chase Chairman and CEO Jamie Dimon

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Dimon said that the historically slow but lengthy U.S. economic expansion — punctuated June 1 by a federal jobs report that showed rising wages and 3.8% unemployment, the lowest in nearly two decades — is producing demand for loans and a wide range of financial services. He said the best banks are capitalizing on the speed and ease of modern technology to deliver such services and credit decisions to clients with haste, driving up satisfaction scores and helping lenders deepen ties with — and sell more to — their customers.

In the wake of several Federal Reserve rate hikes, lending is more profitable, he noted. And following a late 2017 U.S. corporate tax cut, banks are able push more income to their bottom lines and return more capital to shareholders via dividends and share repurchases. Now, with recently passed deregulation legislation aimed at lifting compliance burdens on community and regional banks, and with a new proposal now winding through the capital that would ease limits on trading for banking giants like JPMorgan, costs could decline for some and new avenues for profit could open for others, Dimon suggested.

Dimon said competition is fierce, intensifying and sprouting up in myriad corners of the globe. He sees smaller banks getting stronger, major lenders in China and elsewhere getting more active internationally, online giants such as Amazon.com Inc. making headway in financial services and, of course, a plethora of financial technology companies carving out important new niches and attracting more customers. But Dimon said competition motivates the best banks to continuously learn, innovate and improve.

"I always tell people at JPMorgan, don't sit there and talk about the competition; they're coming," he said. "They're always coming."