Jamie Dimon, CEO of JPMorgan Chase & Co., speaks at the 2025 National Retirement Summit in Washington, DC, on March 12, 2025.
Al Drago | Bloomberg | Getty Images
JPMorgan Chase CEO Jamie Dimon said Tuesday that bankruptcies in the U.S. auto market are a sign that credit conditions for companies have become too lax over the past decade.
Dimon, the longtime leader of the largest U.S. bank by assets, spoke about the recent collapse of auto parts company First Brands and subprime auto lender Tricolor Holdings.
“We've had a credit bull market for most of what now, since 2010 or 2012? That's about 14 years,” Dimon told CNBC on a call with reporters.
“These are early signs that there may be an overabundance as a result,” Dimon said. “If we ever have a recession, there will be a lot more credit problems.”
Dimon used more colorful language about the Tricolor failure later Tuesday.
“If you see one cockroach, there are probably more,” Dimon told analyst Mike Mayo during the bank's earnings conference call. “Everyone needs to be warned about this.”
The two bankruptcies have raised concerns about the hidden risks posed by banks like JPMorgan. Jefferies And Fifth Third provide financing to private companies. In a quarter in which JPMorgan easily beat expectations thanks to booming institutional trading activity, questions from reporters and analysts about credit losses took center stage.
'Not our finest moment'
While JPMorgan managed to avoid First Brands' losses, it did lend to Tricolor, which caused $170 million in writedowns in the quarter, according to CFO Jeremy Barnum. Charge-offs occur when a bank acknowledges that it will not be repaid for loans made.
“It's not our best moment,” Dimon said of the Tricolor episode. “When something like this happens, you can bet we're looking through every issue… You can never avoid these things completely, but the discipline is to look at it in a cold light and go through every little thing.”
Credit metrics tracked by JPMorgan, including early-stage delinquencies, are stable and even better than expected, Barnum said. The company is closely watching the labor market for signs of weakness that could flow into consumer credit, which hasn't happened yet, he said.
The auto companies' failures, which stemmed from pressure on international supply chains partly due to President Donald Trump's tariff escalations, have ensnared a constellation of banks.
This month, investment bank Jefferies said the funds it manages owe $715 million to companies that bought First Brand shares, while UBS said its funds had about $500 million in exposure.
Last month, regional bank Fifth Third announced that it expected up to $200 million in impairment charges due to alleged fraudulent activity at a borrower; the customer was Tricolor, Bloomberg reported.
