JPMorgan should be able to weather growing stress in the private credit market even if the sector faces a broader shakeout, according to a top banking analyst at Wells Fargo . Mike Mayo, head of large-bank research at Wells Fargo, said JPMorgan's recent decision to reduce lending exposure to certain private credit funds by marking down the value of some software-related loans used as collateral reflects active risk management rather than looming losses. "We expect no losses at JPM; it shows they are in position to manage underlying collateral. Large diversified banks seem well positioned," Mayo said in a Thursday note to clients. The private credit industry faces increasing scrutiny following years of rapid growth that pushed lenders toward more risky borrowers and more complex loan structures. Major players have been grappling with fund redemptions, questions about underwriting standards and concerns that advances in artificial intelligence could disrupt some borrowers, particularly software companies. Recently, the Morgan Stanley North Haven Private Income Fund received redemption requests totaling 10.9% of shares outstanding in the first quarter, according to a filing. Deutsche Bank disclosed in its annual report that it has about $30 billion of exposure to private credit, prompting shares in the largest bank in Germany to plunge almost 6%. By contrast, JPMorgan has seen revenue growth roughly twice that of the industry this decade, reducing the need to stretch for riskier deals, Mayo said. The bank also typically lends to private credit funds through senior financing structures, which historically have produced relatively low loan losses, he added. For others, however, another risk is the increasing complexity of credit structures, which Mayo said can exceed the expertise of some lenders. But JPMorgan has maintained strong monitoring of its exposures, he said. "From all indications, JPM's monitoring group has remained strong and hard at work with moves such as this," Mayo wrote. "More generally, large banks seem to have greater sophistication than smaller ones for this type of lending." Shares of JPMorgan have fallen more than 6% this month, and are down for a third successive month, pushing its 2026 decline to nearly 13%.
