Jamie Dimon, the president of JPMorgan, warned Monday that the bank might lose regarding $1 billion from exposure to Russia, the first time the largest US bank by assets has disclosed the size of its potential losses from the conflict in Ukraine.
In his annual letter to shareholders, the Chairman and CEO ofJP Morgan“, the United States to increase its military presence in Europe, and reiterated his call for it to develop a plan to ensure energy security for itself and its allies.
Dimon did not provide details of a potential JPMorgan loss or a time frame for it, but said the bank was concerned regarding the secondary impact of Russia’s invasion of Ukraine on companies and countries.
In recent weeks, global banks have disclosed their exposure to Russia, but Dimon was the only global business leader not to comment on the broader impact of the conflict.
But today, he wrote: “America must be prepared for the possibility of a protracted war in Ukraine with unexpected results… We must prepare for the worst and hope for the best.”
Dimon also touched on the relationship between the United States and China, and said that America should renew its supply chain to limit its scope to include suppliers within the United States or only “friendly allies.” He urged the United States to join the Trans-Pacific Partnership (TPP), one of the world’s largest multinational trade alliances.
Commenting on the macroeconomic environment, Dimon said the number of Fed rate hikes “might be much higher than the market expects”. He also provided details of the bank’s rising expenses, due in part to technology investments and acquisition costs.
This year’s message comes at a time when the Russian-Ukrainian war and soaring inflation are hurting the economy, and Dimon faces new investor skepticism over expenditures.
Some question his plans to increase spending on the bank’s information technology, and campaigns to gain market share in business and geographies.
Dimon has spent more than a decade building what he calls the bank’s “fortified balance sheet”, which he said is now strong enough that JPMorgan can take losses of $10 billion or more and “is still in very good shape.”
While Dimon wrote that he was not concerned regarding the bank’s exposure to Russia, he said the war in Ukraine would slow the global economy and affect geopolitics for decades.
