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Thursday, July 16, 2009

JPM's Dimon: CRE "Big deal for regional banks"

by Calculated Risk on 7/16/2009 09:16:00 AM

JPM Conference call comments on Commercial Real Estate (CRE): (ht Brian)

Analyst: Everyone is still concerned about commercial Real Estate and kind of how it's performing. You haven't really mentioned it as being a problem in the quarter highlighted it. Can you give any color as to how you're seeing general trends in the commercial Real Estate market?

Jamie Dimon: Commercial Real Estate in the United States of America is going to get worse consistently over the next several quarters. That should not be a surprise to anybody. We've got two major Real Estate exposures, we have what we call CTO which is multi-family smaller loans, it's performing fine and-- what we got from WaMu, that's the commercial bank, 30 Billion portfolio from WaMu -- it will get worse but we don't expect it to be significant, materially significant to our numbers, and we also have a more traditional Real Estate portfolio but I would say both the Bank One, JP Morgan and Chase, we've been so conservative of the last eight or nine years it's been doing nothing but in general shrinking other than the acquisition of WaMu [ it’s 12 billion] and losses are, charge-offs were for the Real Estate banking, 186 basis points and the commercial term lending was 36 and both will get worse but they aren't that big a number for us. It [commercial real estate] is a big deal for regional banks.
emphasis added