Fitch Ratings has affirmed the rating on J.P. Morgan Chase & Co. (JPM), with a stable trend, citing the firm’s diversified revenue mix and emphasis on strong balance sheet fundamentals.
These strengths have largely offset market headwinds in the credit and capital markets, Fitch says. “JPM’s comparatively limited exposure to many structured products has clearly benefited the firm and distinguished it from many of its large bank peers. Partially offsetting this advantage, JPM’s exposure to the U.S. consumer through its mortgage, home equity, credit card and auto businesses is considerable and likely to continue to pressure earnings in the near term,” it notes.
Fitch says the firm holds leading market positions in a number of high-margin institutional businesses, including M&A advisory, syndicated loans, and credit derivatives. Its consumer business continues to gain breadth and depth through both acquisitions and organic development.
Prudent liquidity management also remains a strength of the organization, Fitch adds. “Capital is efficiently managed. Credit metrics are solid but face increasing pressure in this weak credit environment,” it says.
On March 17, Fitch affirmed JPM’s ratings in light of its proposed acquisition of The Bear Stearns Companies, Inc., reflecting its belief that the transaction does not significantly increase JPM’s risk profile nor impair its capital structure or liquidity position. The purchase is expected to be immediately accretive to JPM’s earnings.
Fitch affirms ratings for J.P. Morgan Chase
- By: IE Staff
- May 9, 2008 December 14, 2017
- 07:25