Bloomberg reports that JP Morgan has increased its holdings of non-U.S. agency mortgage securities by more than three times to $72 billion.The additions to the bank’s balance sheet have been primarily driven by mortgage products from outside the U.S., and the U.K. and the Netherlands in particular. While the U.K. and Dutch housing markets have struggled of late, JP Morgan appears to be taking advantage of the motivation of institutions in these markets like RBS and ING to trim their own balance sheets.
At the same time, JP Morgan has been shrinking its exposure to U.S. agency mortgage products. The move is in contrast to the bank’s competitors, such as Bank of American and Citigroup, who have increased their domestic agency holdings recently, Bloomberg writes:
JPMorgan last year shrunk its investments in U.S. agency mortgage securities by $28.1 billion to $134.7 billion, according to data compiled by SNL Financial, a Charlottesville, Virginia-based financial-information and research provider.
The rest of the top-25 banks, including Bank of America Corp. and Citigroup Inc., increased their agency portfolios by $121.1 billion to $947.8 billion as their non-agency investments fell $31.6 billion to $98.6 billion, according to data assembled by SNL from regulatory reports.