JPMorgan Reaction to Probes: Cut Things
The regulatory probes into JPMorgan Chase (NYSE:JPM) continue, and the bank’s reaction is now to start cutting some of its assets, reports Fox News Business. What exactly is the nation’s largest bank planning to get rid of?
Part of the reason for selling off assets is an investigation being carried out by the FBI and prosecutors from the Manhattan U.S. Attorney’s office. The aim of the investigation is to determine if bank employees provided regulators with the information needed to investigate power market deals done by the bank.
This newer investigation comes on the heels of $430 million that JPMorgan paid as a penalty in a manipulation case before the Federal Energy Regulatory Commission.
Fox News Business reports that bank insiders say Jamie Dimon, CEO of the bank, has given approval for the sale of non-core assets as well as businesses that are not big moneymakers.
Last month, the bank already said it was no longer going to be involved in the “physical commodities” business. That appears to be just the start though. For instance, just last week the bank announced that it was going to leave the student loan business.
The New York Post notes that the bank has been backing out of the student loan industry for the last few years. It will leave the industry completely on October 12. Bank officials reported a drop in revenue for student loans over the past few years as the government has taken over more of the industry. However, the effect this will have on students is still unclear yet.
Dimon is selling the assets to focus on regulatory issues, says Fox News Business. This comes as no surprise as analysts have noted that the bank’s size, which makes it more difficult to manage, may be part of the reason it continues to be targeted by regulators. Although Dimon wants to avoid reducing the size of the bank and is planning on focusing on core businesses, some analysts think that this size will be impossible to maintain and regulators are going to force it to separate as well.