JPMorgan CEO Sounds Alarm on Auto Market Bankruptcies
The CEO of America’s biggest bank has reportedly issued a warning regarding auto market bankruptcies.
These bankruptcies, JPMorgan Chase CEO Jamie Dimon told reporters Tuesday (Oct. 14), are an indication that lending standards have become too relaxed.
“We’ve had a credit bull market now for the better part of what, since 2010 or 2012? That’s like 14 years,” said Dimon, whose comments were reported by CNBC.
He was speaking in reference to two recent bankruptcies related to the auto sector: car parts company First Brands and subprime lender Tricolor Holdings.
“These are early signs there might be some excess out there because of it,” Dimon said. “If we ever have a downturn, you’re going to see quite a bit more credit issues.”
During his bank’s earnings call later in the day, Dimon’s comments on Tricolor were blunter, the report added.
“When you see one cockroach, there are probably more,” Dimon told analyst Mike Mayo. “Everyone should be forewarned on this one.”
Management said on the call Tricolor’s collapse contributed $170 million in charge-offs for the bank during the quarter.
Dimon’s comments came one day after First Brands CEO resigned amid a Justice Department investigation into the company’s implosion, per a report by the Financial Times.
For its part, Tricolor filed to liquidate in bankruptcy last month amid allegations of fraudulent activity and reports that banks were set to suffer hundreds of millions of dollars in combined losses from loans tied to the company.
As CNBC pointed out, these bankruptcies have led to concerns about the unseen risks at play when banks such as JPMorgan, Jefferies and Fifth Third finance private companies.
Also on Tuesday’s earnings call, JPMorgan said it expects its 2025 card net charge-off rates to be approximately 3.3% on favorable delinquency trends fueled by the ongoing resilience of the consumer. The bank had previously projected deposit growth to be between 3% and 6%, as defined for 2026.
“[T]he personal savings rate is a little bit lower than expected,” Chief Financial Officer Jeremy Barnum told analysts.
“Consumer spending remained robust while income was a bit lower. So that’s all else equal, decreasing balances per account … At the margin, that kind of upward inflection point has been pushed out a little bit. At a high level, we remain quite confident about the overall long-term trajectory.”
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