JPMorgan Chase & Co said on Friday it booked $1.4 billion in anticipation of a mild recession, despite reporting better-than-expected quarterly profit thanks to strong results from its trading arm.
Shares of the biggest US bank were down about 3% in premarket trading at the start of the quarterly earnings season for US companies, which are expected to fall for the first time since the third quarter. of 2020.
While Chief Executive Jamie Dimon said consumers were still spending excess cash and businesses remained healthy, he listed a number of questions about the economic future.
“We do not yet know the final effect of the difficulties of geopolitical tension, including the war in Ukraine, the vulnerability of energy and food supplies, persistent inflation (…) and unprecedented quantitative tightening”.
The bank pointed to a modest deterioration in its macroeconomic outlook, “reflection of a slight recession in the base case”.
JPMorgan’s investment banking unit continued its slump in the quarter, with revenue falling 57% as corporate executives braced for a possible recession instead of spending on big deals.
Market trading income, however, benefited from market volatility as investors moved their chips to weather a high interest rate environment.
Trading income in fixed income markets increased 12% and equity income remained relatively stable, according to the bank.
the gain of JPMorgan for the three months ended December 31 was $11.0 billion, or $3.57 per share, compared with $10.4 billion, or $3.33 per share a year earlier.
Excluding extraordinary items, the company earned $3.56 per share, beating estimates of $3.07.
Source: Reuters
Source: Gestion
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