JPMorgan ‘open for business’ on leveraged loans as rivals grapple with losses

By Matt Tracy

(Reuters) – JPMorgan’s Chief Financial Officer Jeremy Barnum told investors the bank is “very much open for business” in lending as other U.S. banks look to book loans. Large losses on risky loans were approved last year.

“The terms are better, the price is better, we have the necessary resources,” Barnum said on a conference call with analysts. “We’re perfect there. No hiccups and no problems.”

Barnum’s comments came as many U.S. banks reduced lending to subprime borrowers last year, as Wall Street’s demand for loans fell as the Federal Reserve raised interest rates. interest to offset the price.

After a series of losses on credit sales last year, including a $700 million loss on an $8.5 billion debt package to finance the purchase of software maker Citrix Systems Inc, the banks Many have since decided to cancel the loans they approved at the beginning of the year.

About $35 billion to $50 billion of those loans are stuck on banks’ books as they await a better market environment, bankers told Reuters earlier.

Last summer, the Bank of America jointly led a group of banks to provide $ 13 billion in loans and bonds to Elon Musk for his acquisition of social media Twitter. Banks have since struggled to get the debt off their books at a reasonable price, rather than choosing to hold the debt.

When asked if these deals will hamper the lending of big banks like JPMorgan, which is no longer stronger than its peers, Barnum said that the high is reflected in the prices and it is possible Banks absorb losses on existing transactions.

“There’s a little bit of information that the market needs to move to resolve a crisis,” Barnum said. “We don’t believe that’s true.”

Banks must mark the sale of Twitter’s debt and other transactions at their market value on their books, setting aside money for the losses that are reported each quarter. The exact amount remains to be seen, as the bank decides how much to write down based on market checks and judgments.

The Chief Financial Officer of the Bank of America, Alastair Borthwick, said that the company provides the use of loans in its results, without providing information on any major transactions.

“We mark our positions every week,” and book profits or losses through his investment accounts and manual trades, Borthwick said. “It’s all there, our results reflect any brand in any quarter and we follow the process as we always do.”

(Reporting by Matt Tracy; editing by Lananh Nguyen)

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