Jamie Dimon, CEO of JPMorgan Chase & Co., during the America Business Forum in Miami, Florida, United States, Thursday, November 6, 2025.
Eva Marie Uzcategui | Bloomberg | Getty Images
JPMorgan Chase is reducing its exposure to the private credit sector by reducing the value of loans held by the bank as collateral, according to a person familiar with the developments.
The bank’s giant Wall Street trading division reduced the value of loans — most of which were made to software companies — contained in private clients’ financing portfolios, said the person, who requested anonymity, speaking about interactions with clients.
JPMorgan’s move indicates that the largest U.S. bank by assets wants to get ahead of potential turbulence related to private lending to software companies. CEO Jamie Dimon, who has guided 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 will not be able to repay their loans.
Software companies have faced increased scrutiny in recent months, as model updates from OpenAI and Anthropic spark concerns that some vendors are being disrupted by AI. These concerns have triggered a down cycle for private credit players as retail investors withdrew their funds in recent weeks, leading to unusually high redemptions at companies such as Blue owl And black stone.
The adjustments were made to JPMorgan’s financing business, where private finance companies borrow money to amplify fund returns in so-called “back-leverage.” The business is considered relatively risky because it layers leverage on leverage – magnifying losses when the underlying loans deteriorate.
By reducing the collateral for this leverage, JPMorgan reduces the ability of private lending companies to borrow against their loans and, in some cases, could even force companies to post more collateral.
The size of the loans affected and the extent of the reductions at JPMorgan could not be determined.
JPMorgan is potentially the first major bank to take such steps, according to the FT, which was first to report the bank’s price cuts.
The moves are a preventative measure driven by changing market valuations rather than actual loan losses, said the person with knowledge of the bank, who called the move a matter of financial discipline, “rather than waiting for a crisis to arise.”
JPMorgan had previously reduced its influence over the industry at the start of the Covid pandemic, according to the person.