JPMorgan's Dimon: "Wave of Auto Lender Bankruptcies an Early Sign of Excess in Credit Market"

$170 Million Loss Recognized Due to Tricolor Bankruptcy

On October 14 (local time), Jamie Dimon, CEO of JPMorgan Chase, the largest bank in the United States, stated that the recent wave of bankruptcies among subprime auto lenders could be an early sign of excess in the credit market.

JPMorgan Chase headquarters building in Manhattan, New York, USA. Photo by Reuters and Yonhap News

According to CNBC, during the third-quarter earnings conference call, CEO Dimon commented on the recent bankruptcy of the auto lender Tricolor, saying, "If you see one cockroach, there are probably more," and added, "Everyone should be warned about this in advance."

Earlier that day, in a call with CNBC, CEO Dimon said, "We have experienced a credit bull market for the past 14 years," and, referring to the bankruptcy of Tricolor and others, noted, "This is an early sign that there may be some excess in the credit market."

Tricolor, which has provided auto loans to consumers with low credit scores, recently filed for bankruptcy while under government investigation.

The bankruptcy of First Brands, an auto parts company, is also raising awareness among investors about potential risks in the credit market.

In its earnings release, JPMorgan Chase announced that it had written off $170 million in assets related to the Tricolor bankruptcy during the third quarter.

Regarding the bank's exposure to Tricolor, CEO Dimon commented, "It is unfortunate for us."