Meredith Whitney, CEO of the Meredith Whitney Advisory Group, downgraded JPMorgan to “hold” on Tuesday and told CNBC that it had been a "long time coming."
“It wasn’t the right time to do it when the stock announced a $2 billion writedown,” Whitney told "Closing Bell," referring to the bank's admission last month that it would post a trading loss of at least $2 billion.
But with JPMorgan rallying back 17 percent and now trading at a little above tangible book value, Whitney said, “we decided to do it before the holiday weekend in light of this Libor event, which I think is going to get a lot bigger.”
Whitney was referring to Britain's rate-fixing scandal, which this week forced Barclays to pay a $450 million fine and led to the resignations of its top three executives.
Before the downgrade, JPMorgan was the only large-cap bank Whitney had recommended. She said the downgrade brings it in line with her negative stance on the group overall.
“These banks are not even earning their cost of capital,” Whitney said.
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