Jamie Dimon says auto company bankruptcies reveal 'early signs' of excess in corporate lending

JPMorgan Chase CEO Jamie Dimon said Tuesday that bankruptcies successful the U.S. car marketplace are a motion that lending standards grew excessively lax successful the past decade-plus.

Dimon, the longtime person of the largest U.S. slope by assets, was speaking astir the caller illness of car parts steadfast First Brands and subprime car lender Tricolor Holdings.

"We've had a recognition bull marketplace present for the amended portion of what, since 2010 oregon 2012? That's similar 14 years," Dimon told CNBC connected a telephone with reporters.

"These are aboriginal signs determination mightiness beryllium immoderate excess retired determination due to the fact that of it," Dimon said. "If we ever person a downturn, you're going to spot rather a spot much recognition issues."

The brace of bankruptcies person sparked concerns astir the hidden risks progressive erstwhile banks similar JPMorgan, Jefferies and Fifth Third supply financing for backstage companies. In a 4th wherever JPMorgan handily topped expectations, acknowledgment to booming enactment successful organization trading, questions from reporters and analysts astir recognition losses took halfway stage.

JPMorgan managed to dodge losses from First Brands, but it did lend to Tricolor, causing $170 cardinal successful chargeoffs successful the quarter, said CFO Jeremy Barnum. Chargeoffs hap erstwhile a slope recognizes it won't get repaid for loans it made.

"It is not our finest moment," Dimon said of the Tricolor episode. "When thing similar that happens, you could presume that we scour each issue... You tin ne'er wholly debar these things, but the subject is to look astatine it successful acold airy and spell done each azygous small thing."

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