How Will JPMorgan (JPM) Stock React to Exiting Government Securities Business?
NEW YORK (TheStreet) -- JPMorgan Chase (JPM) - Get Report plans to exit the business of settling government securities for dealers by the end of 2017, Bloomberg reports.
The company hopes to focus on more profitable areas of its business, like prime brokerage and custody services.
This shift leaves BNY Mellon (BK) as the only institution handling this portion of the repo market.
"This area is not core to our growth strategy," said Michael Albanese, managing director in investor services for JPMorgan. "We will continue to settle Treasuries in the context of the other business that we support."
U.S. banks have been retreating from the repo market as the business loses its allure as liquidity requirements and capital expenses rise.
Shares of JPMorgan closed down 0.38% to $63.69 on Thursday.
Separately, TheStreet Ratings rated this stock as a "buy" with a ratings score of A-.
The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, growth in earnings per share and attractive valuation levels. TheStreet Ratings feels its strengths outweigh the fact that the company has had somewhat disappointing return on equity.
You can view the full analysis from the report here: JPM
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.