JPMorgan Chase said on Wednesday that its first-quarter profit had fallen sharply from a year earlier, driven by rising spending on bad loans and market turmoil caused by the war in Ukraine. According to her report, earnings fell 42 percent year-over-year to $ 8.28 billion, or $ 2.63 a share. Revenue fell more modestly, by 5% to $ 31.59 billion, beating analysts’ forecast for the quarter.
Shares of the New York-based bank fell 3.2% in early trading
JPMorgan’s quarterly results illustrate how quickly events have changed the outlook for the industry. A year ago, the bank’s chief executive, Jamie Dimon, predicted long-term economic expansion and positive results after billions of dollars in loan loss reserves were released. Now, amid rampant inflation and Europe’s worst post-World War II conflict, he has drawn attention to the opposite – the possibility of a recession.
JPMorgan said it had amassed $ 902 million to build credit reserves for expected loan losses, up from $ 5.2 billion last year. The bank also reported losses of $ 524 million due to cuts and widening spreads following Russia’s invasion of its neighbor.
Dimon said he had amassed credit reserves because of the “greater likelihood of a downturn” in the US economy, in particular the impact of high inflation and the conflict in Ukraine.
We remain optimistic about the economy, at least in the short term – consumer and business balances and consumer spending remain stable – but we see significant geopolitical and economic challenges ahead due to high inflation, supply chain problems and the war in Ukraine, “said Dimon.