JPMorgan Chase reported higher fourth-quarter profits Friday, boosted by income tied to increasing interest rates as the big bank set aside more funds in case of a recession.
Profits came in at $11.0 billion, up six percent from the year-ago level, while revenues rose 18 percent to $34.5 billion.
Chief Executive Jamie Dimon praised the company’s performance, describing the US economy as solid but facing myriad uncertainties.
“The US economy currently remains strong with consumers still spending excess cash and businesses healthy,” Dimon said, while pointing to the Ukraine war, persistent inflation and tightening Federal Reserve policy as headwinds.
“We remain vigilant and are prepared for whatever happens,” Dimon said.
The biggest lift to earnings came from a whopping 48 percent rise in net interest income, offsetting the drag from lower investment banking results and elevated expenses.
The bank also set aside another $1.4 billion in funds in case of loan defaults, after benefiting in the year-ago period from a release of $1.8 billion in reserves.
The reversal reflects a shift in JPMorgan’s baseline forecast, which now reflects a “mild recession,” JPMorgan said.
JPMorgan projected that it would achieve $74 billion in net interest income in 2023, a bit below the level expected by analysts.
Shares fell 2.9 percent to $135.42 in pre-market trading.
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