NEW YORK ( TheStreet) -- JPMorgan Chase ( JPM) said it might scale back its branch expansion plans as regulatory changes increased the cost of doing business in retail banking. " I think we have built 250 branches this year. We indicated we might do more. It's possible we won't now," CEO Jamie Dimon said in a presentation to analysts. "We still need to build branches in certain cities, in particularly California and Florida to build out our footprint, but we will modify them
branch expansion plans and we'll report back to you when we have that." The bank said earlier this year that it would target adding 1,500 to 2,000 branches over the next five years. Dimon said regulations such as the Durbin Amendment, which limits the fees it can charge retailers for processing debit-card transactions, new rules regulating how overdraft fees are charged and higher Federal Deposit Insurance Corp. charges for deposits were likely to hurt margins at some branches. In fact, the diminished profitability of retail banking resulting from these regulations was forcing the bank to rethink its strategy across various products and services, other than branches. JPMorgan estimates that the Durbin Amendment will have a negative impact of $300 million on revenues in the fourth quarter and $1 billion or $600 million after tax on a full-year basis. The rule went into effect in the beginning of the fourth quarter as on October 1. Dimon, however, said that the bank was examining various "creative and smart" ways to offset the revenue loss. The bank also expects to incur $500 million over time as it builds systems to comply with extensive financial regulation and legal issues. "I think we're going to have to build a lot of additional systems by legal entity around the world to accommodate hundreds of new rules, regulations, recordings," Dimon said. "I want to point out that I think some of that's a waste of money, but that's life. We simply have to do it." --Written by Shanthi Bharatwaj in New York >To contact the writer of this article, click here: Shanthi Bharatwaj.