JPMorgan Chase Chief Executive Jamie Dimon said Wednesday he and the bank’s board will “do the right thing” on succession, and warned of the dangers, particularly to small businesses, of non-bank lenders.
Dimon told investors that his timeline for stepping down was less than five years, and could be between two and a half to four and a half years, depending on the board’s decision. He also praised the company’s management team.
He has run the largest US lender for more than 18 years. As one of the longest tenured bank chiefs on Wall Street, his future plans have long been a subject of speculation.
At its investor day earlier this month, Dimon namechecked senior JPMorgan executives who run major divisions as CEO candidates.
JPMorgan’s board recently identified Jennifer Piepszak and Troy Rohrbaugh, co-CEOs of its commercial and investment bank, as candidates for the top job. Marianne Lake, CEO of consumer and community banking, and Mary Erdoes, CEO of asset and wealth management, are also in the running.
Several executives who served under Dimon have gone on to run other banks.
JPMorgan plans to split its chairman and CEO roles when Dimon eventually steps down, it has said in a regulatory filing earlier this year.
Dimon once again warned about the growing market for private credit from non-bank lenders. Problems will eventually emerge in the area, but are unlikely to pose a systemic risk, he said.
When it goes bad, “and it will one day, we don’t know when, there will be a lot of stranded borrowers,” he said, adding that small businesses could be most affected.
Wall Street banks have raised billions of dollars to regain ground in lending to companies in debt-backed deals after private equity and asset management firms muscled in on the business over the last two years.
JPMorgan Chase has set aside $10 billion of its own capital for private credit, but that could grow significantly depending on demand, Reuters previously reported.
More broadly, US consumer finances remain strong, and businesses are keeping up well with loan payments, Dimon said.
“Credit has been the best it has ever been. Middle market losses has been zero for years,” Dimon said, noting that losses in mortgages has also been zero.
The CEO also warned that the surge in its net interest income (NII), or the difference between what it earns on loans and pays out on deposits, is not sustainable. NII is expected to rise to $91 billion this year, excluding its markets division.
