JPMorgan Chase & Co.'s portfolio of consumer loans will continue to shrink into next year as the mortgage market continues cooling.
Charlie Scharf, the chief executive of the banking company's retail financial services division, told investors at the BancAnalysts Association of Boston conference that originations of home equity loans and prime mortgages in particular are "substantially lower," and retail loans overall may fall between 10% and 15% into next year.
He also said that JPMorgan Chase has "a lot of room" to do more bank deals, despite a national cap that bars banking companies from amassing more than 10% of the nation's deposits through acquisitions.
JPMorgan Chase last year bought the failed Washington Mutual Inc.
Scharf reiterated that delinquencies among customers that are less than 30 days past due with their payments are improving, but he said "we are not certain this trend will continue."
"This is a week-to-week, month-to-month thing" to evaluate, Scharf said, repeating the caution executives expressed after reporting third-quarter earnings last month.
While the prices JPMorgan Chase fetches when it sells foreclosed homes is improving in California lately, Scharf said, "We don't feel great about property prices in Florida."
"Florida is not stabilizing," and prices are "unlikely" to improve "in the near future," he said. "In the short term, we'll see more stress" in Florida.
Meanwhile, Scharf said that JPMorgan Chase offered mortgage modifications to about 280,000 customers, 94% of whom would see their payment decrease. Of the modifications done, 77% made more than one payment, and 51% made more than three payments so far.
"Those numbers will grow," he said.
JPMorgan Chase has said that next year it plans to eliminate overdrafts on debit cards, automated teller machine and teller transactions, and will eliminate overdraft fees when an account is overdrawn by less than $5, and reduce the overdraft fee per day.
Scharf reiterated that those measures will cost JPMorgan Chase about $500 million after taxes.