J.P. Morgan Reviewing US Correspondent-Bank Relationships: WSJ

(RTTNews) - J.P. Morgan Chase & Co. (JPM) is reviewing its relationships with several hundred U.S. clients that use the bank for back-office functions such as processing trades, according to a Wall Street Journal report.

The bank has been examining its relationships with so-called domestic correspondent banks, for which it clears payments and processes other transactions. The industrywide review started in January and comes as J.P. Morgan tries to shore up controls in a period of heightened regulatory scrutiny and record fines, said people close to the relationship.

J.P. Morgan stopped soliciting new business from its few hundred domestic-correspondent-banking clients and also stopped accepting new clients while the review of internal controls and clients continues, people close to relationship further said.

Citigroup's Unit Banamex USA is one among the companies that are reviewed by JP Morgan.

A J.P. Morgan spokesman said, "The firm isn't exiting from domestic correspondent banking and pointed to comments he made last August that "serving other financial institutions in correspondent banking has been, and will continue to be, a core strength of ours".