JPMorgan Chase & Co's Chief Executive Officer Jamie Dimon said on Monday that the bank could consider the suspension of dividends for the year 2020 due the escalating COVID-19 crisis. This was despite the bank rolling out relief measures for small businesses and customers.

In his annual letter to the bank's shareholders, Dimon wrote may look at the dividend option if the unemployment rate dipped further to 14 percent during the fourth quarter of the year and if fall in the gross domestic product was as much as 35 percent.

Highlighted several challenges

"If it were to play out, the Board would likely consider suspending the dividend even though it is a rather small claim on our equity capital base. If the Board suspended the dividend, it would be out of extreme prudence and based upon continued uncertainty over what the next few years will bring," Dimon said.

JP Morgan
Jamie Dimon Wikimedia Commons

Dimon highlighted several other challenges that the bank is facing, saying its call centers have struggled in the current environment, with many of them effectively shutting down due to local restrictions.

Will extend benefits to severely affected customers

JPMorgan will extend benefits to customers hit hard by the health crisis, by introducing measures such as waivers for late fees and a 90-day grace period for mortgage and auto loan payments, according to the letter.

The bank said it had extended about $950 million in new loans to small businesses and would continue to extend credit to small businesses in the current environment. In both our central case scenario for 2020 results and in our extremely adverse scenario, we are lending – currently or plan to do so – an additional $150 billion for our clients' needs," Dimon said.

JPMorgan will nominate former International Business Machines Corp Chief Executive Officer Virginia "Ginni" Rometty for election to its board. Rometty will become the executive chairman of IBM on April 6.

(With inputs from agencies)