Bank Analyst Bove to Moneynews: Government May Be After JPMorgan CEO Dimon

Sunday, 19 May 2013 07:30 AM

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JPMorgan Chase CEO Jamie Dimon is facing heat from a lot of sources, and one of them may be the government, says Dick Bove, the legendary bank analyst for Rafferty Capital Markets.

Eight government agencies and the states of California and Michigan are apparently expected to sue JPMorgan, he tells Newsmax TV in an exclusive interview. Other agencies of the federal and state governments want to sue it too, he says.

"So, I don’t know. I’ve never been a conspiratorial thinker, but it does feel a great deal like there is a concerted effort to move this guy out of his company," Bove says.

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"And [it feels like] that effort is being driven by the government, which, if that is true, is as reprehensible in my view as the IRS or the AP situation."

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Is the government after Dimon because of his opposition to much of its banking policy? "I think the issue is whether someone who can be critical of government policies on a national stage can be allowed to stay in position from the perspective of the government," Bove says.

As to the issue of whether Dimon should be allowed to serve as both chairman and CEO, Bove says that in general it's better to have the two positions separate, but that it's not a big deal in Dimon's case.

Indeed, "it is becoming evident that companies that have split these positions really don’t do better than companies that haven’t split the positions," Bove says. "So, I’m not sure that right now that’s the dominant thought concerning what is happening with Jamie Dimon."

There isn't much downside to Dimon serving as chairman, Bove says.

"We’re not dealing with the issue as to whether Jamie Dimon is being paid too much, we’re not dealing with the issue as to whether this company is underperforming," Bove says.

"There are only three companies in the United States in any industry that make more money than JPMorgan does."

The issue is one of risk, Bove says. "Would there be less risk in this company if the two positions were separated?"

His answer: "I think the past five years have proven that JPMorgan has far less risk than most of its peers because it made a lot of money right through this period of crisis. It increased the size of its institutions. It’s posting record results," Bove says.

"So, you know, the risk in owning this stock and the risk in this bank has been substantially less than if you had owned a whole series of other banks, which were not as fortunate."

Dimon has said he may quit JPMorgan if he loses the shareholder vote to stay on as chairman. Bove thinks that would be a wise move.

"What we’re looking at is a vote of confidence, somewhat like an English parliament," he says. "If the shareholders of this company have lost confidence in Jamie Dimon to run this company, which is what this vote now seems to be all about, he should leave."

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