Applicants with criminal records are being considered for entry-level jobs like account servicing … [+]
Topline: JPMorgan Chase announced an expansion of its efforts to hire people with criminal backgrounds Monday, continuing the trend of big companies “banning the box” and giving people second chances.
JPMorgan Chase hired 2,100 people with criminal records in 2018, which equals about 10% of their total hires last year.
The bank knows those people have records, because they conduct background checks on applicants after a job offer has been made.
Applicants with criminal records are being considered for entry-level jobs like account servicing and transaction processing, according to the bank’s press release.
The unemployment rate for formerly incarcerated people is 27%, while the nationwide unemployment rate is 3.5%, according to the bank.
But the tight labor market could be more beneficial to people with criminal records—a July survey from staffing firm Adecco showed that 35% of respondents would consider those applicants, and 21% of respondents are no longer drug-testing them.
Koch Industries, Starbucks, McDonald’s, Target and Home Depot are among other corporations that have increased hiring efforts of the formerly incarcerated since at least 2013.
Surprising fact: The U.S. loses up to $87 billion annually in GDP by excluding people with criminal backgrounds from the workforce, said the bank.
Key background: “Banning the box” refers to removing questions about criminal backgrounds from job applications, a movement that’s been growing over the past two decades. According to the Pew Research Center, as of April black and Hispanic people make up 56% of the jailed population, leading experts to believe the groups are unfairly discriminated against in hiring. But “ban the box” legislation began to pass in the early 2000s, with laws on the books in 35 states and over 150 cities and counties as of July, according to the National Employment Law Project. And the 2018 First Step Act means thousands of people could be eligible for early release from prison, on top of the 700,000 already released annually—signaling a shifting political attitude towards these workers, according to FastCompany.
I’m a New York-based journalist covering breaking news at Forbes. I hold a master’s degree from Columbia University’s Graduate School of Journalism. Previous bylines: Gotham Gazette, Bklyner, Thrillist, Task & Purpose, and xoJane.
From the railroad and steel consolidations brokered by John Pierpont Morgan on Wall Street more than a century ago, to banking consolidation, the financial crisis and Jamie Dimon’s leadership, J.P. Morgan Chase has been at the center of finance for more than a century. Here’s the story of how the country’s largest bank got to where it is today. Biographer of J.P. Morgan Jean Strouse, longtime bank analyst Mike Mayo and CNBC banking reporter Hugh Son help tell the story. You’ll learn about how Aaron Burr and Alexander Hamilton are part of the bank’s history, along with the first ATM, and the company’s position moving forward into the future of digital banking. Watch the video above to see how the country’s largest bank got to where it is today. ***Clarification*** Since 2004, investors in JPM stock have outperformed the bank stock index by an average of 6% return every year. That’s more than 6x the return of the index yearly (13:52) In February, J.P. Morgan Chase announced it was in growth mode, expanding its branch network to cover 93 percent of the U.S. population by the end of 2022. The aggressive growth plans will allow it to reach 80 million more consumers, or about one-quarter of the U.S. population, versus its footprint in 2018, the New York-based bank says. The expansion of physical branches comes amid a consumer shift to mobile and online banking. The average number of teller transactions per customer has plunged 41 percent since 2014, according to J.P. Morgan’s presentation at its investor day meeting. But convenient branch locations are a key consideration for people thinking about switching banks, and most of the firm’s growth in deposits has been fueled by people who use branches frequently, the bank said. The company made it clear it had flexibility in its growth plans: More than 75 percent of its branches could be shuttered within five years or kept open for more than a decade. » Subscribe to CNBC: http://cnb.cx/SubscribeCNBC About CNBC: From ‘Wall Street’ to ‘Main Street’ to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC#CNBC How JP Morgan Chase Became The Largest Bank In The US
Last week’s announcement from Coalition that American and European investment banks’ capital markets and advisory’s revenues hit a thirteen-year low is likely to be the beginning of more challenges to come. Even before that announcement, Moody’s Investor Services had changed its positive outlook on global investment banks to stable precisely due to slower economic growth and lower interest rates.
Drivers of Moody’s Stable Outlook for Global Investment Banks
Moody’s Investors Services
As a recession comes closer, bank risk managers, investors, regulators, and rating agencies will be monitoring banks’ loan impairments carefully. According to the Fitch Ratings’ Large European Banks Quarterly Credit Tracker – 2Q19, released last week, “The economic slow down in Europe has not resulted in material new impaired loans yet, but the substantially weakened economic outlook has increased the likelihood of an at least modest increase in impaired loans.”
Impaired Loans/Gross Loans
Fitch Ratings, Large European Banks Quarterly Credit Tracker
Banks’ high holdings of leveraged loans and below investment grade bonds and securitizations, especially those that are less liquid and harder to value, will also weigh on their earnings as the global economy slowdown intensifies. Fitch Ratings’ recent ‘U.S. Leveraged Loan Default Insight’ shows that its “Top Loans and Tier 2 Loans of Concern combined total jumped to $94.1 billion from $74.5 billion in July. The Top Loans of Concern amount ($40.9 billion) is the largest since March 2017, with six names added to the list and nearly all bid below 70 in the secondary market.” Unfortunately, underwriting continues to deteriorate. The Federal Reserve Senior Loan Officer Survey showed a modest loosening of lending standards on corporate loans for the second consecutive quarter.
Fitch U.S. Leveraged Loan Default Index.
A slowing economy and low interest rate environment are outside of bank managers’ control. Yet, cost efficiency, is something that banks can influence; it needs to improve for banks to be more profitable. European banks’ median/cost income ratio, for example, is 66%. “The sector’s structural cost inefficiency will eventually have to be addressed given the persistently weak rate and revenue outlook. Improving cost efficiency faster and developing fee-generating businesses are crucial to sustain profitability in 2H19 and beyond.”
Fitch Ratings, Large European Banks Quarterly Credit Tracker
Global investment banks will also have to be very attentive to what changes need to be made to their business models. While there will be demand for their advisory and distribution services, the demand will slow down in what is likely an upcoming recession.
Source: Moody’s Investors
Moreover, as banks continue to lay-off front office professionals, some top latent to effect deals well will be lost. Volatility from Trump’s multiple front trade wars and Brexit will put a lot of pressure on banks with capital market activities.
Aggregate capital markets revenue first-half 2009-19 (USD billions)
Moody’s Investor Services
Banks in emerging markets are also under profit pressure. Many of the banks in Latin America already have a negative outlook by ratings agencies, particularly due to a slowdown in Mexico and recessionary pressures in Brazil. Asian banks are particularly sensitive to US-Chinese trade tensions.
Emerging Markets: Median GDP Growth by Region
More than ever, to increase profitability, bank executives will need to find ways to diversify their revenue streams in all parts of their banks, commercial, investment bank, asset management as well as in custody and clearing services. Banks need to be profitable to be liquid and to be well capitalized to sustain unexpected losses. What worries me is that a slowing global economy, coupled with increasing deregulation in the US, such as the recent gutting of the Volcker Rule, will embolden banks to chase yield even more and take excessive risks that could imperil depositors and taxpayers. More than ever, investors, bank regulators, and rating agencies should remain vigilant so as to spare ordinary citizens the pain of when banks run into trouble.
When you’re thinking about money and wealth is hard not to include in that equation Banks. Someone said: Money makes the world go round” and banks, well, that’s where money likes to hang out. Every Aluxer we’ve met has close relations to at least one bank which makes it possible for us to enjoy life to the fullest. #2 *** HSBC Holdings is previously known as The Hong Kong and Shanghai Banking Corporation which was founded in 1865 in Hong Kong. However, in 1991-1992, after acquiring Midland Bank The Hong Kong and Shanghai Banking Corporation moved it’s headquarters to London because it was much better from a financial and strategic point of view.