Trouble in the mortgage markets is not fazing JPMorgan Chase ( JPM), which is actually looking to add personnel to its lending unit. During a presentation at the Merrill Lynch Banking & Financial Services Conference on Tuesday, CEO Jamie Dimon said the firm was looking to build its six core businesses: Banking, retail, credit cards, commercial banking, treasury and securities services and asset management. JPMorgan is also looking to expand its mortgage business. The move is contrary to other lenders and banks including Countrywide Financial ( CFC), which has had to slash thousands of jobs as a result of declining originations and a general malaise over the mortgage industry. "We think this is one of the great opportunities," Dimon said. The plans to hire come as the company prepares to bring $12 billion to $20 billion of subprime, Alt-A loans and jumbo mortgages onto its balance sheet, Dimon said. JPMorgan Chase has emerged relatively unscathed by the credit crunch thus far, compared to other large diversified banks such as Citigroup ( C) and Merrill Lynch ( MER). Those two firms were forced to take billions in writedowns as a result of declining values on their exposure to collateralized debt obligations, or CDOs. The large writedowns ultimately led to the departure of CEOs Chuck Prince at Citi and Stan O'Neal at Merrill Lynch.
Dimon reiterated that in the latest quarter, JPMorgan Chase took markdowns of $1.3 billion on leveraged lending, funded and unfunded commitments and weaker trading performance. At the end of September, the bank had $6.8 billion in its CDO warehouse and unsold positions. Due to declining values, the bank marked the positions down by $339 million for the quarter. JPMorgan's warehouse of subprime mortgages totaled $2.6 billion at the end of the third quarter, while its subprime residuals totaled $474 million, he said. JPMorgan Chase made $3.4 billion, or 97 cents a share, in the latest three months ending Sept. 30, up from the year-ago $3.3 billion, or 92 cents a share. Still, the company said in a quarterly filing with the Securities and Exchange Commission last week that tough market conditions could hit its CDO and subprime-related positions in the current quarter. Dimon did not go into detail about the potential losses. He also said that the company is aggressively growing its wholesale business -- investment banking, asset management and securities services -- overseas, particularly in emerging markets. JPMorgan Chase's relatively positive presentation came after Goldman Sachs' ( GS) bullish outlook -- the firm
shot down rumors it would join the growing ranks of rivals posting multi-billion writedowns of asset-backed securities -- and on the heels of Bank of America's ( BAC) less-than-upbeat forecast. The Charlotte, N.C., bank said earlier in the day that it could face $3 billion in writedowns in the fourth quarter because of its investments in once-highly rated collateralized debt obligations, which have seen their values plummet. JPMorgan Chase shares were recently up $2.63, or 6.2%, to $45.03.