JP Morgan Chase: Profitable bank has £17.7bn bill for staff pay and bonuses

United States investment bank JP Morgan Chase revealed a $28.1bn (£17.7bn) bill for staff pay and bonuses in 2010 yesterday after a 48 per cent leap in annual earnings.

The group set aside $6.6bn (4.2 bn) for staff compensation in the fourth quarter alone, up 29 per cent on a year earlier.

Pay and bonuses for its investment bankers – including between 7,000 and 8,000 based in London – more than trebled year-on-year in the final three months to $1.8bn (1.1bn) in a move likely to raise concerns over the impending bonus round among British banks.

The bumper pay deal for JP Morgan Chase's staff comes after it reported full-year net income of $17.4bn (11bn) for 2010. JP Morgan's fourth quarter profit rose 47 per cent, beating market expectations, as revenue increased and it set aside less to cover bad debts.

The bank is the first of the American players to report in the annual results season, with the US sector being watched closely from Britain as United Kingdom banks prepare to release figures next month.

It is feared big US bonuses will prompt UK counterparts to follow suit, with concerns also that Government attempts to rein in British banker handouts are failing.

JP Morgan declined to reveal how much had been set aside specifically for its year-end bonus pool, but said in yesterday's results that performance-related pay was higher than in 2009.

It plans to reveal handouts to its staff in the next few weeks.

The ratio of compensation to revenues – a key measure of bank pay – rose to 30 per cent in the fourth quarter from 11 per cent a year earlier in its investment banking arm despite a 21 per cent fall in the division's net income.

The investment bank posted profits of $1.5bn (946m) in the October to December quarter.