Banks

JP Morgan Chase to build 400 new branches, raise wages because of the tax cut

Key Points
  • Some 22,000 workers will get hourly pay hikes, with the new pay range from $15 to $18.
  • Chase plans to increase branches by nearly 8 percent with 400 new locations.
  • The bank will also boost small business lending and charitable giving.
Jamie Dimon speaking at the 2017 Delivering Alpha conference in New York on Sept. 12, 2017.
David A. Grogan | CNBC

J.P. Morgan Chase announced plans to spend $20 billion over five years to raise hourly pay for a portion of its workforce, add jobs and open 400 branches in new U.S. locations.

The bank says tax breaks, reduced regulation and an improved business climate have made it possible to make these changes, which also include adding 4,000 jobs and increasing its charitable giving.

Earlier this month, the bank reported fourth-quarter profit that beat expectations despite a $2.4 billion charge related to the tax cuts and a difficult trading environment for its investment bank.

"Having a healthy, strong company allows us to make these long-term, sustainable investments," said J.P. Morgan CEO Jamie Dimon in a statement Tuesday. "We are excited about further investing in our outstanding workforce and expanding into new U.S. markets."

Several large U.S. companies have announced one-time bonuses, investments in jobs and facilities, and growth plans since the tax overhaul enacted in Washington late last year.

J.P. Morgan has more than 252,000 employees, about half of whom work in its consumer and community banking group. It has a little more than 5,100 branches in 23 states.

Hourly wages for some 22,000 workers will rise to between $15 and $18 in more than 100 cities, the bank said. In New York, San Francisco, Boston and Jersey City, New Jersey, the increase will be at the highest end of that range. Employees are also each getting a $750 bonus later this month.

The branch expansion, which includes 3,000 jobs, will target 15 to 20 new markets in several new states over five years, the bank said. Chase has branches throughout the U.S. but some pockets where it currently does not operate include Washington, D.C., Boston and Philadelphia. Adding 400 locations will boost the number of branches by nearly 8 percent.

The bank also says it will increase small business lending 20 percent, to $4 billion, over three years.