J.P. Morgan CEO Buys 500,000 of Bank's Shares -- Update

By Justin Baer 

J.P. Morgan Chase & Co. Chairman and Chief Executive James Dimon bought 500,000 of his bank's shares on Thursday, a person familiar with the matter said.

The $26 million purchase is designed to stem the tide of negative sentiment overwhelming bank stocks this year. The big-ticket stock purchase from one of the country's most well-known bankers followed a 20% decline in J.P. Morgan's share price so far this year and a broader selloff that has hit big banks such as Citigroup Inc. and Bank of America Corp. particularly hard.

Bank stocks have fallen about twice as much as broader stock-market averages this year as investors fret over slowing economic growth, falling energy prices and the possibility that interest rates will fall, a tough combination for bank profits.

"Jamie Dimon stepped up to the plate," said Mike Mayo, an analyst with CLSA, who took the purchase as a positive sign for shares. "It's a big number." The recent market decline is "either a financial catastrophe, or this is an epic buying opportunity, and Dimon is in position to know what outcome is more likely."

Including his latest purchase, Mr. Dimon will own 6,746,402 shares worth a total of about $357.7 million, based on Thursday's closing price. J.P. Morgan shares rose 2% in aftermarket trading after sliding 4% during the regular trading session.

In recent days, the slide in bank stocks has become an avalanche. Bank of America Corp. shares tumbled 6.8% Thursday, their biggest one-day loss in nearly three years. Citigroup fell 6.5%. In the first six weeks of this year, the biggest U.S. banks have given up nearly three years of gains.

Citigroup and Bank of America now trade for about half their book value, a level last seen in late 2012.

Meanwhile, Citigroup Chief Financial Officer John Gerspach bought about $500,000 worth of Citigroup shares Tuesday, the New York bank disclosed Thursday in a regulatory filing.

Write to Justin Baer at [e-mail] and Christina Rexrode at [e-mail]

(END) Dow Jones Newswires

February 11, 2016 18:09 ET (23:09 GMT)

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