JPMorgan Chase reported on Thursday that second -quarter profits slumped as banks had to create reserves for bad loans of $ 428 million and suspend share buybacks.
The move reflects Chairman and CEO Jamie Dimon’s increasingly cautious stance. “The U.S. economy continues to grow and both the job market and consumer spending, as well as their ability to spend, remain healthy, ”he said in an earnings statement.
“But geopolitical tensions, high inflation, declining consumer confidence, uncertainty over what rates to pass and unprecedented quantitative tightening and its impact on global liquidity, combined with the war in Ukraine and the impact on global energy are likely to give negative impact on the global economy one day, ”he said, warning.
Based on observations, they chose to temporarily suspend the repurchase of its shares to help achieve regulatory capital. Last month, banks had to keep their dividends unchanged while rival companies increased their payments.
Shares of JPMorgan had fallen nearly 5% in trading on Thursday, hitting a new 52 -week low.
The bank’s loss of revenue was “not horrible” because non -Wall Street operations performed well as deposits increased and borrowers continued to repay debt, said Wells Fargo bank analyst Mike Mayo.
JPMorgan's bank performance is the focus of market players to get an indication of the state of the banking industry. On the other hand, the unemployment rate remains low, meaning consumers and businesses have less difficulty repaying loans. Rising interest rates and loan growth mean that banks' core lending activities are becoming more profitable.
