JPMorgan expects rise in consumer loan defaults
JPMorgan Chase & Co. is expecting consumer loan defaults to rise in the fourth quarter, as will loan loss provisions, according to a Securities and Exchange Commission filing today.
“Given the potential stress on the consumer from rising unemployment, the continued downward pressure on housing prices and the elevated national inventory of unsold homes, management remains extremely cautious,” the New York-based bank said in the SEC filing.
“Management expects continued deterioration in credit trends for the consumer portfolios, which will likely require additions to the consumer loan loss allowance in the fourth quarter of 2008.”
The firm is also anticipating a jump in net charge-offs for its home lending portfolio in the fourth quarter and into next year, according to the regulatory filing.
JPMorgan Chase is coming off a third quarter that saw profits fall 84% to $527 million, or 11 cents a share (InvestmentNews, Oct. 15).
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