JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said Wednesday that he and the bank’s board will “do the right thing” with his successor and warned about the dangers of non-bank lending, especially to small businesses.
Dimon told investors he plans to step down in less than five years, but that it could be between two and a half and four and a half years, depending on what the board decides to do, and he praised the company’s management team.
He has run America’s largest bank for more than 18 years, and as one of Wall Street’s longest-serving bank presidents, his plans for the future have long been the subject of speculation.
At an investor briefing earlier this month, Dimon named several senior JPMorgan executives who run key divisions as candidates for the CEO position.
JPMorgan’s board recently named Jennifer Piepszak and Troy Lohrbaugh, co-CEOs of the bank’s commercial and investment banking, as candidates for the top job, with Marianne Lake, CEO of consumer and community banking, and Mary Ardoes, CEO of asset and wealth management, also on the list.
Several of Dimon’s former executives have since gone on to run other banks.
JPMorgan said in a regulatory filing earlier this year that it plans to split the chairman and CEO roles when Dimon eventually steps down.
Dimon renewed his warning about the expansion of the private lending market by nonbank financial institutions, which he said would face problems over time but were unlikely to pose a systemic risk.
If the situation worsens, “we don’t know when, but many borrowers will be left in limbo,” he said, adding that small and medium-sized businesses could be the hardest hit.
As private equity and asset management firms have entered the secured debt-lending business over the past two years, Wall Street banks have raised billions of dollars to regain their footing in lending to companies through secured debt.
Reuters previously reported that JPMorgan Chase has set aside $10 billion of its own capital for private credit, but that could increase significantly depending on demand.
More broadly, Dimon said U.S. consumer credit remains strong and businesses are keeping up with their loan payments.
“Credit is at an all-time high. The middle market has had zero losses for years,” Dimon said, noting that mortgage losses have also been zero.
The CEO also warned that a sharp rise in net interest income (NII) — the difference between what it earns on loans and what it pays out on deposits — is not sustainable. NII is expected to rise to $91 billion this year excluding markets.
