Wall Street banks disclose over $100 billion in private credit exposure; JPMorgan CEO says there is no need for excessive concern.

Major Wall Street banks have systematically disclosed for the first time their loan sizes to the private credit industry, totaling over $100 billion. As concerns about the asset quality of private credit and the impact of artificial intelligence continue to rise, this figure has attracted intense market attention.

Latest financial reports from JPMorgan Chase, Citigroup, and Wells Fargo show that the three banks’ exposures to private credit institutions are approximately $50 billion, $22 billion, and $36.2 billion respectively.

JPMorgan Chase CEO Jamie Dimon said during an analyst conference call, he is "not particularly worried" about this, noting that the private credit industry would need to see "very large scale losses" before banks would actually be impacted.

This disclosure comes at a time when the private credit industry is facing multiple pressures—underlying loan quality is being questioned, and some investors have requested large-scale redemptions from Business Development Companies (BDC) linked to institutions like Blue Owl Capital and Apollo Global Management.

JPMorgan Chase: Only extreme-scale losses would impact banks

During the post-earnings call, Dimon assessed potential risks in a relatively calm manner.

"It would take very large-scale losses in the private credit sector for banks to be impacted," he said. "This doesn’t mean there won’t be some pressure and tension, and we may need to take countermeasures at that time, but I am not particularly worried."

Citigroup further emphasized that its loan portfolio to non-bank financial institutions has had zero losses since inception, and pointed out that loans to BDCs constitute less than 1% of its total loans to non-bank financial institutions. By the end of last year, Citigroup’s loans to non-bank financial institutions totaled $118 billion.

Wells Fargo: Loan portfolio has about 40% loss cushion

Among the three banks, Wells Fargo disclosed the most details about its exposure structure. As of March 31, the bank’s loans to non-bank financial institutions totaled $210.2 billion, with private credit-related exposure around $36.2 billion, including approximately $8 billion in loans to business development companies, mainly unlisted BDCs.

Wells Fargo noted in Tuesday’s investor presentation that the relevant loan portfolio has about a 40% loss cushion, meaning that before losses are absorbed by Wells Fargo, the fund side will bear roughly 40% of the losses first.

Additionally, over 98% of related transactions have margin adjustment clauses, so if the underlying asset’s credit performance deteriorates, the bank can adjust margin requirements accordingly.

Looking at the collateral structure, the commercial services, software, and healthcare industries combined account for about half of Wells Fargo’s private credit-related collateral value, of which software companies represent 17%.

Rising bad loans, AI shock triggers concerns

Although the tone from bank executives remains generally calm, some data indicate pressure is mounting. Wells Fargo’s annual filings show that bad loans from non-bank borrowers rose to $245 million last year, compared to just $24 million in 2024, a significant increase.

Recent pressure on the private credit industry is partly due to market concerns that artificial intelligence could disrupt certain corporate sectors, such as software developers. Redemption requests related to BDCs under Blue Owl Capital and Apollo Global Management have surged in recent months, highlighting uncertainties in valuation and the quality of underlying assets.

From a loan structure perspective, Wells Fargo’s loans to asset management companies and funds among non-bank financial institution loans are the largest. This type of loan grew fastest in 2025, with a 42% increase, and currently registers only $1 million in bad loans.

Statistical discrepancies: NDFI loans under "business credit intermediaries" are an approximate indicator

It's worth noting that each bank’s statistical definition of private credit-related exposure differs from regulatory reporting requirements.

About a year ago, regulators started requiring banks to report the size of their loans to non-deposit financial institutions (NDFI). However, this category is broad and boundaries are fuzzy, so the closest measure investors currently have to assess banks’ association with the private credit industry is the NDFI loan data under the "business credit intermediary" category.

This inconsistency in frameworks means a comprehensive assessment of the true exposure between banks and the private credit industry is still challenging, and investors need to be cautious when interpreting each bank’s data.

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