NOTE: On October 25, 2018, the press release was corrected as follows: In the debt list, under JPMorgan Chase & Co., the second line was changed to “Junior Subordinated Regular Bond/Debentures, Placed on Review for Upgrade, currently Baa2 (hyb).” Revised release follows.
New York, August 02, 2018 -- Moody's Investors Service ("Moody's") is reviewing all long-term
ratings of JP Morgan Chase & Co. (JPM) for upgrade as well
as the ratings of its lead bank subsidiary JPMorgan Chase Bank,
N.A. (Aa2 for deposits) and certain other subsidiaries.
Moody's has affirmed all Prime-1 short-term ratings and
assessments of JPM and its subsidiaries. A complete list of affected
ratings and entities can be found at the end of this press release.
RATINGS RATIONALE
The review for upgrade reflects JP Morgan's strong franchises,
diversified business mix and management's consistent execution,
which is extending JPM's competitive advantage over many peers.
JPMorgan has steadily built each of its business lines in a prudent and
disciplined fashion through economic and market cycles. As a result,
these multi-year investments produce substantial earnings streams
for further reinvestment ($44 billion of pre-provision profits
in the last twelve months) into each franchise. Considering its
robust financial flexibility and leading market franchises, Moody's
expects that JPM should have the wherewithal to innovate its client offerings,
and particularly as the digital innovation evolution accelerates,
cement many of its customer relationships and extend its competitive advantage.
JPM however operates with lower risk-adjusted capital ratios and
targets than some of its peers with extensive capital market operations,
due in part to its ability to steadily generate capital. Therefore,
JPM's capital management policies will be a focus of the review.
Moody's also noted that despite JPM's exemplary record of
earnings consistency and substantial product and geographic diversification,
the large size and complexity of JPM's capital markets businesses can
pose substantial creditor risks. Furthermore, Moody's
noted that JPM's pervasive complexity represents a formidable management
and corporate governance challenge. These risks are partially mitigated
by the strong competitive standing of JPM's markets business as
well as the more stable earnings streams from its retail, commercial
and asset and wealth management businesses. However, management
depth, orderly management transition and active board oversight
are important rating considerations and will be a key focus of the ratings
review.
WHAT COULD MOVE THE RATINGS UP/DOWN
The review for upgrade will focus on management's risk controls
and governance (particularly within the CIB), the board's
oversight of risk, and the firm's capital management policies.
JPM could be upgraded if the review process concludes with a view that
management is well prepared to contain risks and preserve capital through
future, and more stressful market conditions.
JPM could be downgraded if the bank experiences a significant deterioration
in its capital or liquidity levels, demonstrates a marked increase
in its risk appetite, or experiences a major litigation or other
sizeable operational risk charge or control failure.
The methodologies used in rating J.P. Morgan Securities,
LLC and J.P. Morgan Securities plc were Banks published
in August 2018, and Securities Industry Market Makers published
in June 2018. The principal methodologies used in rating JPMorgan
Chase & Co., JPMorgan Chase Bank, N.A.,
Chase Bank USA, National Association, JPMorgan Chase Bank,
N.A., London Branch, JPMorgan Chase Bank,
N.A., New York Branch, JPMorgan Chase Bank,
N.A., Paris Branch, JPMorgan Chase Bank,
N.A., Singapore Br, JPMorgan Chase Bank,
N.A., Toronto, J.P. Morgan AG,
J.P. Morgan Bank Canada, JP Morgan International Derivatives
Ltd, JP MORGAN STRUCTURED PRODUCTS BV, JPMorgan Chase Financial
Company LLC, BANK ONE Capital III, BANK ONE CORPORATION,
Bank One, Michigan, Bear Stearns Companies LLC. (The),
J.P. Morgan & Co. Incorporated, Morgan
Guaranty Trust Company of New York, and J.P. Morgan
Australia Ltd. was Banks published in August 2018. Please
see the Rating Methodologies page on www.moodys.com for
a copy of these methodologies.
On Review for Upgrade:
..Issuer: JPMorgan Chase & Co.
.... Issuer Rating, Placed on Review
for Upgrade, currently A3, rating under review from stable
.... Junior Subordinated Regular Bond/Debentures,
Placed on Review for Upgrade, currently Baa2 (hyb)
.... Senior Unsecured Medium-Term Note
Program, Placed on Review for Upgrade, currently (P)A3
.... Subordinate Medium-Term Note Program,
Placed on Review for Upgrade, currently (P)Baa1
.... Senior Unsecured Shelf, Placed
on Review for Upgrade, currently (P)A3
.... Pref. Shelf Non-cumulative
Shelf, Placed on Review for Upgrade, currently (P)Baa3
.... Subordinate Shelf, Placed on Review
for Upgrade, currently (P)Baa1
.... Pref. Stock Non-cumulative
Preferred Stocks, Placed on Review for Upgrade, currently
Baa3(hyb)
.... Subordinate Regular Bond/Debentures,
Placed on Review for Upgrade, currently Baa1
.... Senior Unsecured Regular Bond/Debentures,
Placed on Review for Upgrade, currently A3, rating under review
from stable
.... Senior Unsecured Regular Bond/Debenture,
Placed on Review for Upgrade, currently (P)A3, rating under
review from stable
.... Commercial Paper, Placed on Review
for Upgrade, currently P-2
.... Other Short-Term, Placed
on Review for Upgrade, currently (P)P-2
..Issuer: JPMorgan Chase Bank, N.A.
.... Adjusted Baseline Credit Assessment,
Placed on Review for Upgrade, currently a3
.... Baseline Credit Assessment, Placed
on Review for Upgrade, currently a3
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... LT Bank Deposit Rating, Placed
on Review for Upgrade, currently Aa2, rating under review
from stable
.... Issuer Rating, Placed on Review
for Upgrade, currently Aa3, rating under review from stable
.... Subordinate Bank Note Program,
Placed on Review for Upgrade, currently (P)A1
.... Senior Unsecured Bank Note Program,
Placed on Review for Upgrade, currently (P)Aa3
.... Subordinate Medium-Term Note Program,
Placed on Review for Upgrade, currently (P)A1
.... Senior Unsecured Medium-Term Note
Program, Placed on Review for Upgrade, currently (P)Aa3
.... Senior Unsecured Regular Bond/Debentures,
Placed on Review for Upgrade, currently Aa3, rating under
review from stable
..Issuer: Chase Bank USA, National Association
.... Adjusted Baseline Credit Assessment,
Placed on Review for Upgrade, currently a3
.... Baseline Credit Assessment, Placed
on Review for Upgrade, currently baa3
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... Issuer Rating, Placed on Review
for Upgrade, currently Aa3, rating under review from stable
.... Subordinate Bank Note Program,
Placed on Review for Upgrade, currently (P)A1
.... Senior Unsecured Bank Note Program,
Placed on Review for Upgrade, currently (P)Aa3
.... LT Bank Deposit Rating, Placed
on Review for Upgrade, currently Aa2, rating under review
from stable
.... Senior Unsecured Regular Bond/Debentures,
Placed on Review for Upgrade, currently Aa3, rating under
review from stable
..Issuer: J.P. Morgan Securities,
LLC
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Issuer Rating, Placed on Review
for Upgrade, currently A1, rating under review from stable
..Issuer: J.P. Morgan Securities plc
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Issuer Rating, Placed on Review
for Upgrade, currently A1, rating under review from stable
..Issuer: JPMorgan Chase Bank, N.A.,
London Branch
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... Senior Unsecured Medium-Term Note
Program, Placed on Review for Upgrade, currently (P)Aa3
..Issuer: JPMorgan Chase Bank, N.A.,
New York Branch
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... Subordinate Medium-Term Note Program
(Foreign Currency), Placed on Review for Upgrade, currently
(P)A1
.... Senior Unsecured Medium-Term Note
Program, Placed on Review for Upgrade, currently (P)Aa3
..Issuer: JPMorgan Chase Bank, N.A.,
Paris Branch
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... LT Bank Deposit Rating, Placed
on Review for Upgrade, currently Aa2, rating under review
from stable
..Issuer: JPMorgan Chase Bank, N.A.,
Singapore Br
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... LT Bank Deposit Rating, Placed
on Review for Upgrade, currently Aa2, rating under review
from stable
.... Senior Unsecured Medium-Term Note
Program, Placed on Review for Upgrade, currently (P)Aa3
..Issuer: JPMorgan Chase Bank, N.A.,
Toronto
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... LT Bank Deposit Rating, Placed
on Review for Upgrade, currently Aa2, rating under review
from stable
..Issuer: J.P. Morgan AG
.... Adjusted Baseline Credit Assessment,
Placed on Review for Upgrade, currently a3
.... Baseline Credit Assessment, Placed
on Review for Upgrade, currently a3
.... LT Counterparty Risk Assessment,
Placed on Review for Upgrade, currently Aa2(cr)
.... LT Counterparty Risk Rating, Placed
on Review for Upgrade, currently Aa2
.... LT Issuer Rating, Placed on Review
for Upgrade, currently A1, rating under review
.... LT Bank Deposit Rating, Placed
on Review for Upgrade, currently Aa2, rating under review
..Issuer: J.P. Morgan Bank Canada
.... LT Bank Deposit Rating, Placed
on Review for Upgrade, currently Aa2, rating under review
from stable
..Issuer: JP Morgan International Derivatives Ltd
.... Backed Senior Unsecured Regular Bond/Debentures,
Placed on Review for Upgrade, currently Aa3, rating under
review from stable
..Issuer: JP MORGAN STRUCTURED PRODUCTS BV
.... Backed Senior Unsecured Medium-Term
Note Program, Placed on Review for Upgrade, currently (P)Aa3
..Issuer: JPMorgan Chase Financial Company LLC
.... Backed Senior Unsecured Medium-Term
Note Program, Placed on Review for Upgrade, currently (P)A3
.... Backed Senior Unsecured Regular Bond/Debentures,
Placed on Review for Upgrade, currently A3, rating under review
from stable
.... Backed Senior Unsecured Shelf,
Placed on Review for Upgrade, currently (P)A3
..Issuer: BANK ONE Capital III
.... Backed Pref. Stock Preferred Stock,
Placed on Review for Upgrade, currently Baa2 (hyb)
..Issuer: BANK ONE CORPORATION
.... Subordinate Regular Bond/Debentures,
Placed on Review for Upgrade, currently Baa1
..Issuer: Bank One, Michigan
.... Subordinate Regular Bond/Debenture,
Placed on Review for Upgrade, currently A1
..Issuer: Bear Stearns Companies LLC. (The)
.... Issuer Rating, Placed on Review
for Upgrade, currently A3, rating under review from stable
.... Backed LT Issuer Rating, Placed
on Review for Upgrade, currently A3, rating under review from
stable
.... Senior Unsecured Regular Bond/Debentures,
Placed on Review for Upgrade, currently A3, rating under review
from stable
.... Commercial Paper, Placed on Review
for Upgrade, currently P-2
.... Backed ST Issuer Rating, Placed
on Review for Upgrade, currently P-2
..Issuer: J.P. Morgan & Co.
Incorporated
.... Subordinate Regular Bond/Debentures,
Placed on Review for Upgrade, currently Baa1
.... Senior Unsecured Regular Bond/Debentures,
Placed on Review for Upgrade, currently A3, rating under review
from stable
..Issuer: Morgan Guaranty Trust Company of New York
.... Backed Senior Unsecured Regular Bond/Debenture,
Placed on Review for Upgrade, currently Aa3, rating under
review from stable
Affirmations:
..Issuer: Chase Bank USA, National Association
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Bank Note Program, Affirmed
(P)P-1
.... ST Bank Note Program, Affirmed
P-1
.... ST Bank Deposit Rating, Affirmed
P-1
..Issuer: J.P. Morgan AG
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Issuer Rating, Affirmed P-1
.... ST Bank Deposit Rating, Affirmed
P-1
..Issuer: J.P. Morgan Australia Ltd.
.... Backed Commercial Paper, Affirmed
P-1
..Issuer: J.P. Morgan Bank Canada
.... ST Bank Deposit Rating, Affirmed
P-1
..Issuer: J.P. Morgan Securities plc
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Issuer Rating, Affirmed P-1
..Issuer: J.P. Morgan Securities,
LLC
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Issuer Rating, Affirmed P-1
.... Commercial Paper, Affirmed P-1
..Issuer: JP MORGAN STRUCTURED PRODUCTS BV
.... Backed Other Short Term, Affirmed
(P)P-1
..Issuer: JPMorgan Chase Bank, N.A.
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Bank Deposit Rating, Affirmed
P-1
.... ST Bank Note Program, Affirmed
P-1
.... Other Short Term, Affirmed (P)P-1
..Issuer: JPMorgan Chase Bank, N.A.,
London Branch
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... Other Short Term, Affirmed (P)P-1
..Issuer: JPMorgan Chase Bank, N.A.,
New York Branch
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
..Issuer: JPMorgan Chase Bank, N.A.,
Paris Branch
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Bank Deposit Rating, Affirmed
P-1
..Issuer: JPMorgan Chase Bank, N.A.,
Singapore Br
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Bank Deposit Rating, Affirmed
P-1
.... Other Short Term, Affirmed (P)P-1
..Issuer: JPMorgan Chase Bank, N.A.,
Toronto
.... Backed Commercial Paper, Affirmed
P-1
.... ST Counterparty Risk Assessment,
Affirmed P-1(cr)
.... ST Counterparty Risk Rating, Affirmed
P-1
.... ST Bank Deposit Rating, Affirmed
P-1
Outlook Actions:
..Issuer: BANK ONE Capital III
....Outlook, Changed To Rating Under
Review From No Outlook
..Issuer: BANK ONE CORPORATION
....Outlook, Changed To Rating Under
Review From No Outlook
..Issuer: Bank One, Michigan
....Outlook, Changed To Rating Under
Review From No Outlook
..Issuer: Bear Stearns Companies LLC. (The)
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Chase Bank USA, National Association
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: J.P. Morgan & Co.
Incorporated
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: J.P. Morgan AG
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: J.P. Morgan Bank Canada
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: J.P. Morgan Securities plc
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: J.P. Morgan Securities,
LLC
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JP Morgan International Derivatives Ltd
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JP MORGAN STRUCTURED PRODUCTS BV
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase & Co.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase Bank, N.A.
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase Bank, N.A.,
London Branch
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase Bank, N.A.,
New York Branch
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase Bank, N.A.,
Paris Branch
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase Bank, N.A.,
Singapore Br
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase Bank, N.A.,
Toronto
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: JPMorgan Chase Financial Company LLC
....Outlook, Changed To Rating Under
Review From Stable
..Issuer: Morgan Guaranty Trust Company of New York
....Outlook, Changed To Rating Under
Review From No Outlook
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Peter E. Nerby
Senior Vice President
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Ana Arsov
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653
