JPMorgan Chase reports lower profits, gives cautious economic outlook
Source: AFP
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JPMorgan Chase reported a drop in second-quarter profits on Thursday, reflecting the impact of a weakening macroeconomic outlook that led it to set aside funds in case of bad loans.
The big US bank's earnings came in at $8.6 billion for the quarter, down 28 percent from the year-ago period in results that missed analyst expectations.
Revenues were $30.7 billion, up one percent.
Chief Executive Jamie Dimon said key elements in the US economy remained healthy, such as the job market and consumer spending.
But headwinds -- including high inflation, geopolitical uncertainty and fast-changing Federal Reserve policy to sharply curtail liquidity -- "are very likely to have negative consequences on the global economy sometime down the road," Dimon said.
The bank added $428 million in credit reserves due to a "modest deterioration in the economic outlook." In the year-ago period, JPMorgan's profits were boosted by a $3 billion release in reserves.
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JPMorgan enjoyed a boost from higher net interest income following Fed interest rate increases. But the bank also incurred higher expenses on salaries, technology and marketing.
In corporate and investment banking, JPMorgan posted higher revenues in its trading businesses, but lower investment banking fees.
Dimon said the bank performed well in the quarter and was "prepared for whatever happens" in the global economy.
JPMorgan temporarily suspended share buybacks to meet new federal stress tests requirements for managing risk assets, Dimon said.
Shares fell 2.8 percent to $108.82 in pre-market trading.
Source: AFP
