May 7 (Bloomberg) -- JPMorgan Chase & Co., the second- largest U.S. bank by deposits, said it may have to pay the Federal Deposit Insurance Corp. $750 million to $1.5 billion in one-time assessments to replenish the government insurance fund.
The New York-based lender announced the payments today in a regulatory filing. The FDIC’s deposit-insurance fund, supported by fees on insured banks, plummeted 45 percent to $18.9 billion in the fourth quarter, the end of a year in which 25 banks closed. The agency has imposed a one-time emergency assessment to rebuild reserves. FDIC Chairwoman Sheila Bair said she may trim the fee if Congress increases the agency’s borrowing power.
JPMorgan also said the U.S. unemployment rate may continue to rise until 2010, reaching 9 percent to 10 percent before the economy begins to recover, according to the filing. The bank also expects continued decline in home prices and for “capital markets to remain under stress.”
Chief Executive Officer Jamie Dimon has led his firm through the financial crisis better than most rivals. The results of a government stress test today found the lender didn’t need to raise additional capital to make it through adverse economic conditions.
Government regulators are considering legislation and rules that could “limit or restrict” the firm’s businesses as well as “impose additional costs” for complying with them, the regulatory filing said.
Loan losses in JPMorgan’s home equity portfolio could reach $1.4 billion in the “next several quarters,” while prime mortgages could lose $500 million, the filing said.
By the second-quarter, the firm said credit-card charge offs could be 9 percent and “possibly trend higher in the second half of the year,” numbers that exclude loans acquired from the bank’s purchase of most of Washington Mutual Inc. in September. WaMu’s credit-card default rate could be as high as 24 percent by the end of the year. The bank said it may set aside more money to cover potential losses.
The New York-based lender announced the payments today in a regulatory filing. The FDIC’s deposit-insurance fund, supported by fees on insured banks, plummeted 45 percent to $18.9 billion in the fourth quarter, the end of a year in which 25 banks closed. The agency has imposed a one-time emergency assessment to rebuild reserves. FDIC Chairwoman Sheila Bair said she may trim the fee if Congress increases the agency’s borrowing power.
JPMorgan also said the U.S. unemployment rate may continue to rise until 2010, reaching 9 percent to 10 percent before the economy begins to recover, according to the filing. The bank also expects continued decline in home prices and for “capital markets to remain under stress.”
Chief Executive Officer Jamie Dimon has led his firm through the financial crisis better than most rivals. The results of a government stress test today found the lender didn’t need to raise additional capital to make it through adverse economic conditions.
Government regulators are considering legislation and rules that could “limit or restrict” the firm’s businesses as well as “impose additional costs” for complying with them, the regulatory filing said.
Loan losses in JPMorgan’s home equity portfolio could reach $1.4 billion in the “next several quarters,” while prime mortgages could lose $500 million, the filing said.
By the second-quarter, the firm said credit-card charge offs could be 9 percent and “possibly trend higher in the second half of the year,” numbers that exclude loans acquired from the bank’s purchase of most of Washington Mutual Inc. in September. WaMu’s credit-card default rate could be as high as 24 percent by the end of the year. The bank said it may set aside more money to cover potential losses.
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