By Jonathan Stempel
Dimon, who ran Bank One Corp before selling it to JPMorgan
for $56.9 billion in 2004, has largely been on the deal making
sidelines since replacing William Harrison as JPMorgan's chief
executive at the end of 2005. Rivals Citigroup Inc
Dimon said a purchase would have to make business sense, be executed well, and carry a "right and fair" price that likely doesn't dilute earnings per share.
Dimon has said he would like to expand in Florida, where both banks have major presences, and California, where Washington Mutual is prominent.
JPMorgan has been hurt less by credit market turmoil than many of its peers, although its $2.97 billion fourth-quarter profit was down 34 percent from a year earlier.
Through Wednesday, JPMorgan shares were up 10 percent since Dimon took over, versus declines of 45 percent at Citigroup, 8 percent at Bank of America, 35 percent at Wachovia, 22 percent at Merrill and 5 percent at Morgan Stanley.
Dimon said JPMorgan is expanding its balance sheet with
subprime and "jumbo" mortgages, the latter of which are too
large to be bought by Fannie Mae
Less likely to recover is demand for complex debt such as collateralized debt obligations and a wide variety of mortgage- and asset-backed securities, where Dimon expects "materially reduced" issuance compared with earlier in the decade.
Even if credit markets recover, Dimon expects some products to disappear, including CDOs of CDOs and structured investment vehicles. Tight credit could weigh on JPMorgan's investment bank, which could face "a tough time" in 2008, he said.
In afternoon trading, JPMorgan shares rose 96 cents to $44.68 on the New York Stock Exchange.
