JPMorgan Chase on Thursday reported a fall in second-quarter earnings, reflecting the impact of a weaker macroeconomic outlook that caused the company to set aside funds in case of troubled loans.
Profits for the big US bank came in at $8.6 billion for the quarter, down 28 percent from the same period last year, with results missing analysts’ expectations.
Revenue was $30.7 billion, up 1 percent.
Chief Executive Jamie Dimon said key elements of the US economy have remained healthy, such as the job market and consumer spending.
But headwinds — including high inflation, geopolitical uncertainty and a rapidly changing Federal Reserve policy to severely restrict liquidity — “will very likely have a negative impact on the global economy at some point,” Dimon said.
The bank added $428 million in credit reserves due to a “slight deterioration in the economic outlook.” In the year-ago period, JPMorgan’s profits were boosted by a $3 billion release of reserves.
JPMorgan benefited from higher net interest income following Fed rate hikes. But the bank also incurred higher spending on salaries, technology and marketing.
In corporate and investment banking, JPMorgan saw higher trading revenues but lower investment banking fees.
Dimon said the bank performed well during the quarter and is “prepared for anything” that happens in the global economy.
JPMorgan has temporarily suspended share buybacks to meet new federal stress testing requirements for managing risky assets, Dimon said.
Shares fell 2.8 percent in premarket trading to $108.82.
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