(Adds details from presentation)
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 percent in three years.
The bank boosted its target for return on tangible common equity (ROTCE), a widely watched profit measure, to 17 percent from 15 percent, 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 percent because the recent changes in federal taxes would likely add about two percent points of return.
JPMorgan's ROTCE in 2017 was 13 percent, excluding one-time accounting adjustments for the tax law change.
The slides showed that JPMorgan expects benefit from changes in the U.S. tax law to add 3 percentage 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.
JPMorgan is the most profitable of the big U.S. banks. Its 13 percent ROTCE in 2017 compared with about 11 percent at Wells Fargo & Co, Goldman Sachs Group Inc, Bank of America Corp and Morgan Stanley and 8 percent at Citigroup Inc.
JPMorgan is also the biggest U.S. bank by assets, with a balance sheet of $2.5 trillion. The slides showed how JPMorgan expects to use its profitability and its size to become even bigger and make more money.
The earnings simulation portrayed higher interest rates contributing about $2.5 billion to the increase in pretax profit. The bank projected net interest income of $54 billion to $55 billion for 2018.
The slides also showed annual operating expenses rising to as much as $62 billion in 2018. Total noninterest expense for 2017 was $58.43 billion. Much of the increase in the spending plan is for technology and marketing, the slides showed.
Shares of JPMorgan were marginally down at $118.30 in premarket trading on very light volume.
On Monday, JPMorgan reached an all-time closing high of $118.77, up 11 percent year-to-date, compared with an 8 percent rise in the KBW bank stock index and a 4 percent rise in Standard & Poor's 500 stock index. (Reporting by Sweta Singh in Bengaluru and David Henry in New YorkEditing by Saumyadeb Chakrabarty)