JPMorgan may skip dividends
Dimon also said that the vast majority of the bank’s 16,850 ATMs were 'well-stocked and still functioning' to provide cash for customers
- Published 7.04.20, 2:02 AM
- Updated 7.04.20, 2:02 AM
- a min read
JPMorgan Chase & Co’s top boss, Jamie Dimon, on Monday said he sees a “bad recession” in 2020, and that the largest US bank could suspend its dividend if the coronavirus crisis deepens.
Dimon, widely regarded as the face of the US banking sector, is the most prominent voice on Wall Street so far to project that the economic cost of coronavirus will not evaporate quickly, and said the bank’s earnings will be down “meaningfully in 2020”.
But, Dimon said, even in the worst case scenario, the bank is strong and will continue lending to customers and will not need any relief from the federal government.
JPMorgan could look at suspending dividends if the gross domestic product were to fall as much as 35 per cent in the second quarter and the unemployment rate were to rise further to 14 per cent in the fourth quarter of the year, the chief executive officer wrote in his annual letter to shareholders.
Questions are mounting about whether big US banks will have to cut dividends later this year as the coronavirus crisis puts a record portion of Americans out of work, making it difficult for borrowers to pay back loans.
“If the board suspended the dividend, it would be out of extreme prudence and based upon continued uncertainty over what the next few years will bring,” Dimon said.
Dimon highlighted some challenges seen at the bank’s call centres, where a handful of staff have fallen ill, customer call volumes are at record highs and local restrictions have effectively shuttered some offices.
Dimon also said that the vast majority of the bank’s 16,850 ATMs were “well-stocked and still functioning” to provide cash for customers.