JPMORGAN Chase & Co reported a lower-than-expected quarterly revenue on Wednesday as dealmaking slowed and the lender began constructing mortgage loss reserves within the face of decades-high inflation and the Ukraine disaster.
Funding banking income for giant banks stalled after the Russian invasion of Ukraine in late February. Within the first quarter, the full worth of pending and accomplished offers fell to its lowest for the reason that second quarter of 2020, in accordance with Refinitiv knowledge.
The biggest US lender, whose fortunes are sometimes seen as a barometer of the well being of the financial system, reported a 28% drop in funding banking income within the first quarter.
Credit score prices swung dramatically to $1.46 billion as the corporate added to reserves for mortgage losses. A yr earlier, JPMorgan outcomes benefited from a detrimental provision of $4.16 billion when it drew down additional reserves it had constructed up in the course of the pandemic.
“We stay optimistic on the financial system, not less than for the quick time period … however see important geopolitical and financial challenges forward as a consequence of excessive inflation, provide chain points and the battle in Ukraine,” Chief Govt Jamie Dimon mentioned in a press release.
The lender additionally mentioned its board accepted a share buyback plan of $30 billion.
JPMorgan posted a revenue of $8.28 billion, or $2.63 per share, within the quarter ended March 31, in contrast with $14.3 billion, or $4.50 per share, a yr earlier.
Analysts on common had anticipated earnings of $2.69 per share, in accordance with Refinitiv. It was not instantly clear if the reported numbers have been similar to estimates.
The massive US banks are reporting outcomes at a time when inflation is at its highest in a long time, which could lead on the Federal Reserve to hike rates of interest extra aggressively this yr.
Whereas that’s good for giant lenders like JPMorgan, speedy fee hikes might decelerate the financial system and scupper a nascent restoration from the pandemic.
Internet reported income fell to $30.72 billion from $32.27 billion a yr earlier.
Different giant US banks together with Citigroup, Wells Fargo and Goldman Sachs will report outcomes on Thursday, whereas Financial institution of America reviews outcomes subsequent Monday. – Reuters