JPMorgan Chase, which is reeling from the fallout of a big trading loss at one of its divisions, announced a broad reshuffling of its top management on Friday.
It was the second round of management reorganization at the nation's largest bank since it revealed the loss that has ballooned to up to $5.8 billion from an initial estimate of $2 billion. The loss has prompted two congressional hearings and led to investigations from international regulators.
It has also led to calls to break up the big banks and also for the resignation of CEO Jamie Dimon, who up until then had built a reputation as a steady leader. Dimon initially called the trade a "tempest in a teapot," before backtracking and revealing the scope of losses and apologizing several times for his mischaracterization.
"Today's appointments are a natural step in aligning our businesses more closely to make our company even stronger," Dimon said in a statement.
Among the appointments announced Friday, the biggest promotion went to Matt Zames who takes on the title of chief operating officer. It is being read on Wall Street as the clearest sign yet that he is being groomed to succeed Dimon.
Until the trading loss was announced on May 10, 41-year-old Zames was co-head of global fixed income at the investment bank. He was promoted soon after to replace Ina Drew, the chief investment officer who oversaw the division where the loss occurred. Drew resigned in the days after the loss was revealed.
Zames will share the role with Frank Bisignano who is also chief administrative officer at the firm. Bisignano was tapped last year to lead the beleaguered mortgage banking business, which had contributed to major losses for the bank and also embarrassments when it was found out that that division had unlawfully foreclosed on homes of service members while on active duty.
Some analysts were left scratching their heads after the announcement, trying to figure out what the reshuffle meant.
"JPMorgan is sending message that it is breaking up Main Street from Wall Street," said Mike Mayo, a banking analyst at brokerage CLSA.
In announcing the management changes, JPMorgan has combined its consumer businesses under one umbrella and its investment banking under another. Mayo believes it was the bank's attempt to show that its Main Street banking operations which offer checking and savings accounts and mortgage loans are being managed completely separately from its more volatile and risky investment banking businesses.