Jamie Dimon, CEO of JPMorgan Chase & Co., during the America Business Forum in Miami, Florida, USA, on Thursday, November 6, 2025.
Eva Marie Uzcategui | Bloomberg | Getty Images
JPMorgan Chase Reduces its exposure to the private lending industry by reducing the value of loans the bank holds as collateral, according to a person familiar with the moves.
The bank’s massive Wall Street trading division has reduced the value of loans – largely made to software companies – in the financing portfolios of private lending clients, said the person, who asked not to be named discussing the client interactions.
JPMorgan’s move suggests that the largest U.S. bank by assets wants to head off potential turmoil related to private loans to software companies. CEO Jamie Dimon, who has led his bank through multiple crises during his two decades at the helm of JPMorgan, is known for constantly reminding his executives of the risk that borrowers won’t be able to repay their loans.
Software companies have come under scrutiny in recent months as model updates from OpenAI and Anthropic raise concerns that some vendors will be disrupted by AI. The worries have triggered a downturn for private credit players as retail investors have withdrawn funds in recent weeks, leading to unusually high corporate repossessions Blue owl And Blackstone.
The adjustments were made in JPMorgan’s financing business, where private lending firms borrow money to boost fund returns, known as “back leverage.” The business is considered relatively risky because it builds one leverage after another – magnifying losses if the underlying loans fail.
By lowering the collateral for this leverage, JPMorgan is reducing the ability of private lending companies to borrow against their loans and, in some cases, could even force companies to post more collateral.
The amount of the loans affected and the extent of the haircuts at JPMorgan could not be determined.
JPMorgan may be the first major bank to make such moves, according to the FT, which first reported the bank’s discounts.
The moves are a preemptive move based on changes in market valuations rather than actual loan losses, said the person with knowledge of the bank, who called the move financial discipline “rather than waiting until a crisis comes.”
JPMorgan had previously reduced leverage on the industry in the early days of the Covid pandemic, according to the person.
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