CORRECTED-BREAKINGVIEWS-Jamie Dimon starts to walk the doomsday talk

By Stephen Gandel

NEW YORK, March 12 (Reuters Breakingviews) - Jamie Dimon has a penchant for ominous warnings. The CEO’s bankers at JPMorgan JPM.N may have taken them to heart. The firm cut its loans outstanding to business credit intermediaries, like private credit funds and other corporate lenders, by $453 million in the fourth quarter of 2025, according to a Breakingviews review of data collected by KBRA Financial Intelligence. It comes as worries about buyout barons’ lending arms mount. With over $27 billion of IOUs still on the Wall Street titan’s books, this move represents only a gentle tapping of the brakes. Even so, it stands in contrast to rivals, and may portend further tightening.

Dimon’s rhetoric has, in prior quarters, seemed oddly discordant with what his bank was actually doing. When disclosing losses tied to bankrupt used car dealer and subprime auto lender Tricolor last year, he warned that any isolated credit “cockroaches” may be signs of a deeper infestation. Yet Chief Financial Officer Jeremy Barnum urged calm, saying that risks in lending to so-called non-bank financial institutions were not “any more elevated” than traditional loans to businesses or consumers. JPMorgan remains the most prolific lender among its major peers to private equity funds, which would surely take a hit if the credit complex built on top of their buyouts teeters.

By January, though, the tone had shifted. In a presentation to investors, JPMorgan emphasized that its lending to private credit was diversified and structured to allow the bank to pull back quickly if needed. Some loans, it said, contained “unique deleveraging features.” It now appears to be exercising those provisions, reducing its assessment of the value of some of the collateral that its clients borrow against, the Financial Times reported.

Cutting overall exposure is a show of further action behind the cautious words. JPMorgan was the only major U.S. bank to pull back in the fourth quarter, by about 1.6% of loans outstanding. Even including Dimon’s firm, lending by the six largest Wall Street institutions — including Bank of America BAC.N, Citigroup C.N, Wells Fargo WFC.N, Goldman Sachs GS.N and Morgan Stanley MS.N — rose nearly 8%, to just over $213 billion.

Any broader pullback could matter. Private credit funds, like business development companies, extend facilities that borrowers can pull down over time, which certain vehicles report as unfunded commitments. If borrowers rapidly draw those lines just as investors seek to redeem their holdings, the need for bank-provided liquidity rises.

Most BDCs run with plenty of room for excess borrowing and have other means of getting it. A full-blown credit crunch is not yet playing out. Still, Dimon’s antenna for detecting stress — honed during the 2008 financial crisis — is better-tuned than most. JPMorgan’s actions are an important leading indicator of what might be coming.

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CONTEXT NEWS

JPMorgan Chase has marked down the value of certain loans collateralizing its credit lines with private lenders, the Financial Times reported on March 11, which could effectively reduce their borrowing capacity.

Regulatory data show that the largest U.S. bank slowed its lending to private credit funds in the fourth quarter, in contrast to domestic peers.