JPMorgan profit falls 28%, Dimon cautious on global economy

July 14 (Reuters) – JPMorgan Chase & Co reported 28% lower than expected second-quarter earnings on Thursday as the largest bank in the United States set aside large sums of money to meet potential risks in the face of growing risks due to the economic downturn.

The bank’s shares fell by more than 4% when it recorded $ 1.1 billion to repay its debt losses compared to last year when it released $ 3 billion from its reserves.

Four major US banks are expected to record $ 3.5 billion in losses over the period, as they prepare for the recession as the US Federal Reserve tightly raises interest rates to curb inflation. Read more .

Chief Executive Officer Jamie Dimon pointed out a number of issues including political tensions, rising inflation, declining consumer confidence and “unpredictable” tightening threats that threaten global economic growth.

Closer to home, however, the economy continues to grow and the labor market and consumer spending remain healthy, Dimon said.

The bank posted a profit of $ 8.6 billion, or $ 2.76 per share, lacking expert expectations of $ 2.88 per share, according to Refinitiv.

Other major US banks including Citigroup and Wells Fargo, Morgan Stanley will announce the results this week, while Goldman Sachs and Bank of America (BAC.N) will release large bank notes next week.

Analysts predict a sharp decline in payments for the second quarter since last year, when banks released lost credit reserves and benefited from growth in sales.

The company also suspended temporary restitution to increase its volume.

JPMorgan earnings hurt the larger market and the future of the US stock index amplifying losses after its findings.

IT’S DOWN

Commercial banking spending fell 61% to $ 1.4 billion, mainly due to lower interest rates from companies and loans and repayments.

Like its Goldman Sachs and Morgan Stanley rivals, JPMorgan last year rode strong waves and advised several large businesses, rewriting some of the biggest market trends and helping to consolidate corporate-specific agreements.

However, the Russian invasion of Ukraine in February and fears related to the economic downturn disrupted the merger and acquisition (M&A) operation in 2022. The profits of internationally announced global sales in the second quarter decreased by 25.5% annually to $ 1 trillion, according to Dealogic data. read more

M&A activity in the United States dropped 40% to $ 456 billion in the second quarter.

The bank also reported $ 31.6 billion, up 1%, while interest rates were $ 15.2 billion, up 19% quarter.

Reports of Noor Zainab Hussain and Niket Nishant in Bengaluru and David Henry in New York; Edited by Saumyadeb Chakrabarty

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