JPMorgan, America's largest bank by assets, announced Tuesday that it would be setting aside $500 million as a safety net to prepare for possible bad loans to oil and gas companies during the first quarter of 2016, according to Reuters.
The massive safety net would lie on top of the $815 million the bank has already set at the end of 2015. Apart from this, JPMorgan also stated that it would be adding an additional $100 million to increase reserves for metals and mining loan exposure.
With the current state of the global economy, and with the oil market once more plunging to new lows, the bank estimated that if the price of oil per remains or goes below $25, it would need to set aside about $1.5 billion to cover the firm's losses that would be incurred during the next 18 months, reported The Street.
Regardless of the announcement, however, the bank's CEO, Jamie Dimon, stated that he remained confident about JPMorgan's profitability. In order to prove his point, he bought 500,000 shares of the bank, which cost him about $26 million.
His decision has paid off with investors, with the company's stocks going up four percent since the CEO's announcement, reported CNBC News.
With the four percent increase, the CEO's statement, which cost him $26 million, ended up netting him a profit of about $2 million.
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