JPMorgan advises investors to vote against the splitting proposal

By Staff Writer

Apr 08, 2016 09:28 AM EDT

JPMorgan Chase CEO Jamie Dimon And Detroit Mayor Duggan Discuss The Bank's Investment In Detroit(Mark Wilson/Getty Images) (Credit: Getty Image)

JPMorgan Chase, a US-based financial service provider, has advised its shareholders to vote against the proposal to split up the bank. The bank warned its shareholders that the breakup proposal will not benefit its investors. The bank's request follows Bartlett Naylor's proposal to split the business into several companies.

Bartlett Naylor, an investor of the bank, intends to suggest at the annual summit on May 17 to consider breaking the bank's business into two or several units, Reuters said quoting a regulatory filing. He advises breaking JPMorgan's business into two units, with one focusing on consumer lending and basic business while the other division performing investment banking activities like market-making, trading, and underwriting.

Naylor has filed similar resolutions at Citigroup and Bank of America over the recent periods. But JPMorgan rejected his proposal to form a special team to review options for splitting the bank, saying that the division would adversely impact investors' interest in the bank.

Managing risk issues on Wall Street continues to be a matter of debate at the US presidential election campaign, with Bernie Sanders, a Democratic Party candidate, backing banks' dividing approach. He has promised to form a list of commercial banking giants, insurance firms, and shadow banks within the initial 100 days of his government and to divide them in the first year.

CFO READER'S CHOICE quoted a company's response statement, which said that JPMorgan's board is willing to pull back its products, businesses, and clients that are not profitable. "The board will continue its active oversight of strategy and therefore believes the formation of a special committee as proposed is unnecessary," according to a response statement.

JPMorgan stock recorded a 3.5% decline in short interest. The firm's net short interest amounted to 30.66 million shares during April, a decline of 3.5% from 31.77 million shares, registered previously. The company's stock fell 2.50% to $57.34 in the previous trading session, according to SMALLCAPWIRED.

The institutional sentiment dropped to 1.1 in the third quarter of 2015, down from 1.14 in the second quarter of 2015. The ratio plunged as 83 funds sold all their shares in the bank while 666 lowered positions. Nearly 89 funds purchased stakes in JPMorgan while 734 boosted positions.

Yale University maintains 34.82% of its portfolio in the bank for 3.41 million shares. Tegean Capital Management poses 13.66% of its investment portfolio for 300K shares. While Western Asset Management has 17.13% of its portfolio in the bank for 320K shares. Out of 28 analysts researching JPMorgan stock, 26 analysts rated the stake with "buy" grade, two analysts rated the stock with "sell" grade, while four analysts gave the stock a "hold" rating.

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