JPMorgan Chase & Co. CEO Jamie Dimon leaves the U.S. Capitol on February 13, 2025, after meeting with Republicans on the Senate Banking, Housing, and Urban Affairs Committee on bank abolishment.
Tom Williams | Cq-roll Call Inc. | Getty Images
JPMorgan Chase & Co. Chief Executive Jamie Dimon said Tuesday that the collapse in the U.S. auto market is a sign that lending standards have become too lenient than they have been in more than a decade.
Mr. Dimon, who spent many years leading the nation’s largest bank by assets, spoke about the recent failures of auto parts company First Brands and subprime car lender Tricolor Holdings.
“We’ve had a credit bull market for quite some time since 2010 or 2012. It’s been about 14 years,” Dimon told CNBC on a call with reporters.
“Those are early signs that there could be a surplus because of that,” Dimon said. “If there’s a recession, there’s going to be more credit issues.”
The two bankruptcies raised concerns about the risks banks such as JPMorgan, Jefferies and Fifth Third offer when lending to private companies. Questions from reporters and analysts about credit losses dominated a quarter in which JPMorgan easily beat expectations thanks to strong institutional trading activity.
JPMorgan managed to avoid losses from First Brands, but the loan to Tricolor resulted in a $170 million charge-off in the quarter, CFO Jeremy Burnham said. A charge-off occurs when a bank realizes that a loan it made will not be repaid.
“This wasn’t our finest moment,” Dimon said of the Tricolor episode. “When something like that happens, you might think we’re scrutinizing every issue… You can’t avoid these things completely, but the discipline is to look at it calmly and consider every little thing.”
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