JP Morgan rolls our Covid-19 relief measures, may suspend dividend
The bank said it had extended about $950m in new loans to small businesses
JP Morgan will extend benefits to customers hit hard by the health crisis
JPMorgan could consider suspending dividend for 2020 due to the ongoing coronavirus crisis, chief executive Jamie Dimon said on Monday, even as the bank rolled out relief measures for customers and small businesses.
The biggest US bank by assets could look at the dividend if the gross domestic product were to fall by as much as 35 per cent in the second quarter and unemployment rate were to plunge further to 14 per cent in the fourth quarter of the year, Mr Dimon wrote in his annual letter to shareholders.
“If it were to play out, the Board would likely consider suspending the dividend even though it is a rather small claim on our equity capital base. 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,” Mr Dimon said.
Mr Dimon highlighted several other challenges that the bank is facing, saying its call centres have struggled in the current environment, with many of them effectively shutting down due to local restrictions.
JP Morgan will extend benefits to customers hit hard by the health crisis, by introducing measures such as waivers for late fees and a 90-day grace period for mortgage and auto loan payments, according to the letter.
The bank said it had extended about $950 million in new loans to small businesses and would continue to extend credit to small businesses in the current environment.
“In both our central case scenario for 2020 results and in our extremely adverse scenario, we are lending - currently or plan to do so - an additional $150 billion for our clients’ needs,” Mr Dimon said.
JPMorgan will nominate former IBM chief executive Virginia “Ginni” Rometty for election to its board. Ms Rometty has just been named the executive chairman of IBM.