BREAKINGVIEWS-JPMorgan lawsuit exposes banks’ Trump bump dilemma

By Stephen Gandel

NEW YORK, Jan 23 (Reuters Breakingviews) - It turns out that Trump bumps have an upside and a downside. Squinting at U.S. banks’ stock charts, you might have trouble telling them apart from technology high-fliers of late. Investor euphoria has sent Wall Street soaring, in great part on hopes of a massive boost from looser regulation. The president’s new lawsuit against JPMorgan reveals the bind inherent in that promise. Boss Jamie Dimon is rarely shy about voicing his opinion. Donald Trump is even less reticent to dole out punishment.

Filed Thursday, the suit seeks $5 billion in damages for what it describes as “political discrimination,” charging that the bank shut accounts belonging to Trump and his companies. It also targets Dimon directly, claiming that the CEO authorized putting the president on a “blacklist.” JPMorgan cautiously says it respects “the President’s right to sue us,” and also “our right to defend ourselves,” countering that the suit “has no merit.”

The episode highlights growing strain between Trump, Dimon, and large U.S. banks. The White House has also demanded that credit-card issuers cap their interest rates at 10%, a move that would significantly dent earnings for JPMorgan and its peers. The day before the lawsuit landed, at the World Economic Forum in Davos, Dimon described the plan as “an economic disaster.”

It’s deeply awkward timing: Dimon has yet to detail how JPMorgan will deploy a trove of excess capital freed up by the same president now suing him. This, at the same time as the bank disclosed that it awarded him a 10% pay bump in 2025, to $43 million.

To be fair, as the longest‑serving CEO of a major U.S. bank, Dimon is extremely successful. He is also notoriously brash, issuing habitually dire predictions about the folly of rivals and even describing supporters of the opposition Democratic Party as having “big hearts and little brains.”

A vindictive president makes that a liability. Investors certainly expect Dimon to tread carefully. JPMorgan’s stock now trades at its highest valuation in years. Some of that is down to its return on equity reaching 17% last year, from 10% a decade ago. But it now trades at double the multiple of book value it did then, too, indicating yet more growth hopes ahead.

Trump’s deregulatory push in great part stokes those hopes. The same goes for the rest of Wall Street, too, but JPMorgan faces the added weight of already being the biggest lender. Trump also needs the banks, to help push the economy forward. But if this lawsuit is a reminder of anything, it’s that it’s an unequal partnership, always subject to change.

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CONTEXT NEWS

On January 22, U.S. President Donald Trump filed a lawsuit against JPMorgan Chase and its CEO Jamie Dimon, claiming the firm closed bank accounts for political reasons. The bank says the lawsuit is baseless and that it does not deny customers bank accounts for political or religious reasons.

Shares of JPMorgan, which have more than doubled in the past two years, are down 7% year-to-date. The bank said that “we respect the President’s right to sue us and our right to defend ourselves.”