Dimon says new card cuts profit by up to $300 million in quarter
JPMorgan Chase & Co.’s new Sapphire Reserve credit card will reduce the bank’s profit by $200 million to $300 million in the fourth quarter, according to Chief Executive Officer Jamie Dimon.
“The card has been doing great” and was embraced by consumers before the bank did any marketing, Dimon said Tuesday at an investor conference in New York. “Now we have to account for acquisition cost in that business.”
JPMorgan introduced the card in August with a 100,000-point sign-up bonus for customers who spend $4,000 in the first three months. The points are worth $1,500 in travel booked through Chase’s website. The cards, which carry a $450 annual fee, were in such demand shortly after the launch that the bank temporarily ran out of the metal it uses to make them.
JPMorgan is expected to post about $5 billion in profit this quarter, according to the average estimate of analysts in a Bloomberg survey.