Jamie Dimon tells shareholders he expects the coronavirus to cause a 'bad recession' and 'financial stress similar to the global financial crisis,' at a minimum

Brian Snyder/ReutersJamie Dimon, CEO of JPMorgan Chase, takes part in a panel discussion about investing in Detroit at the Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., April 11, 2018.

In his annual letter to JPMorgan shareholders, CEO Jamie Dimon warned that while the bank is strong, it won’t be untouched by the fallout stemming from the coronavirus pandemic.

The coronavirus pandemic will be damaging to the US economy, according to Dimon. “At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,” he said.

He continued: “Our bank cannot be immune to the effects of this kind of stress.”

Dimon’s annual letter comes as the US is grappling with the economic consequences of the coronavirus pandemic, which has roiled global markets and shut down much of the country in an attempt to curb the spread of disease. Most agree that the US is either already in a recession or will soon be in one, marked by massive slowdowns in output and an elevated unemployment rate – in the last two weeks alone,10 million Americans have filed for unemployment benefits as coronavirus layoffs persist.

In response to the crisis, JPMorgan has stopped buying back its own stock, Dimon said, adding that halting buybacks “was simply a prudent action.” Dimon also said that the board would consider suspending the bank’s dividend only in an “extremely adverse scenario” that would include a 35% contraction of gross domestic product in the second quarter and an unemployment rate of 14%.


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“If the Board suspended the dividend, it would be out of extreme prudence and based upon continued uncertainty over what the next few years will bring,” Dimon wrote in the letter, published Monday.

Still, Dimon said that the bank’s capital resources and liquidity remain strong, and that JPMorgan is currently lending – or plans to lend – an additional $US150 billion for client needs.

JPMorgan is working “closely” with all levels of government during the crisis, but has not yet asked for any regulatory relief, Dimon said. But he said that the financial system is in need of overhaul, which should come when the current crisis subsides.

Next, there needs to be a solid plan to “carefully” return Americans to work that includes testing, Dimon said.

“The country was not adequately prepared for this pandemic – however, we can and should be more prepared for what comes next,” he wrote. “Done right, a disciplined transition would maximise the health of Americans and minimise the time, extent and suffering caused by the economic downturn.”

Dimon briefly addressed well-wishes he received after having emergency heart surgery in March, but didn’t give any further updates on his health.

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