Jamie Dimon Sees ‘Early Signs’ Of Excess In Corporate Lending Amid Bankruptcies In US Auto Market: Report

JPMorgan Chase & Co. (JPM) CEO Jamie Dimon reportedly stated on Tuesday that there are “early signs” of excess in corporate lending in the U.S., as evidenced by bankruptcies in the auto industry.

Dimon was speaking to reporters after JPMorgan’s third-quarter (Q3) results, according to a CNBC report. He was referring to the collapse of auto parts company First Brands and car lender Tricolor Holdings.

“These are early signs there might be some excess out there because of it. If we ever have a downturn, you’re going to see quite a bit more credit issues,” Dimon said, while adding that there has been a credit bull market since 2010 or 2012.

JPMorgan’s shares were down nearly 3% in Tuesday morning’s trade. Retail sentiment on Stocktwits around the company trended in the ‘extremely bullish’ territory at the time of writing.

Dimon’s comments come after JPMorgan recognized a $170 million charge-off on its loan to Tricolor. A charge-off occurs when a lender determines that a borrower will not repay a loan.

“It is not our finest moment. When something like that happens, you could assume that we scour every issue... You can never completely avoid these things, but the discipline is to look at it in cold light and go through every single little thing,” Dimon said, referring to the Tricolor chargeoff, according to the report.

Earlier this month, investment bank Jefferies Financial Group Inc. (JEF) disclosed that funds run by one of its asset management units are owed $715 million by companies that bought parts from First Brands. According to a report by The Wall Street Journal, UBS Group AG (UBS) disclosed in bankruptcy filings that funds it operates have a $500 million exposure. These funds include the O’Connor hedge-fund unit that UBS agreed to sell earlier this year.

JPM stock is up 25% year-to-date and 35% over the past 12 months.

Also See: Walmart Teams Up With OpenAI To Let Its Customers Shop On ChatGPT

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