Chillin' out till it needs to be funded
Last week’s letter by Jamie Dimon was highlighted i n media as variously “8 reasons to buy JP Morgan stock” and more. However, pending Brunco Iskil’s role clarification to regulators if required and the achievement of a 20% ROE by the bank and the sure positive surprise in results later this week, it is likely again a damp squib in achieving any kind of new cult following for JP Morgan and its leader.
Jamie Dimon, I daresay had a much bigger presence as a leader in the Banking Industry before the letter and somehow the man behind a 15% Return on Tangible equity at one of the world’s largest mortgage banks which is arguably losing more than $6 bln due to the argumentations of the mortgage crisis and the ongoing underperformance of mortgage and I daresay most Fixed Income markets is unable to convert, his missives achieving only to underline that much of what can be said is already said and the leader is in this case just following what has already been said.
JP Morgan provided more than $17 bln in SME credit last year yet Bank of America would like to be called the leader in the area. Chase also issued new credit cards to 8.5 mln customers and a less than 1 mln mortgages in the same 12 month period. Add to it another $12 bln in buybacks and no one can beat the new #1 in financial performance , least of all non banks walking with a Fed banking license in case their TBTF status puts others at risk
And while Citi could not allocate $2 bln to return to shareholders or a quarter in dividend per share due to a TCE target of 5% in the stress etest, a one and only Insitution like JP Morgan will always be at hand to defend unwittingly, the regulators who are frequently targeted for having reduced the Industry to nothing more than its savings account rate as return int he Industry, maybe just more a small term deposit with one of its branches.