JPMorgan profits drop 42%, bank writes down Russian assets

Apr 13, 2022, 4:52 AM | Updated: Apr 14, 2022, 8:05 am

NEW YORK (AP) — JPMorgan Chase said its first quarter profits dropped by 42% from last year, partly because the bank wrote down nearly $1.5 billion in assets due to higher inflation and Russia’s war in Ukraine.

The nation’s largest bank by assets said it earned a profit of $8.3 billion, or $2.63 per share, down from a profit of $14.3 billion, or $4.50 a share, in the same period a year earlier. The results missed the forecasts of Wall Street analysts, who were looking for JPMorgan to earn $2.72 a share, according to FactSet.

JPMorgan Chase Chairman and CEO Jamie Dimon said in a statement that the bank sees “significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine.”

A year ago, JPMorgan boosted first-quarter profit by releasing more than $4 billion in credit reserves tied to the improving economy and waning COVID-19 pandemic. For more than a year, JPMorgan and other banks had been releasing the funds they had socked away to cover potentially bad loans. Those releases had boosted the banks’ profits significantly, but investors knew these one-time bumps in profits were temporary.

Now JPMorgan is going in reverse. The bank set aside $1.46 billion to write off its assets tied to Russia as well as assets that have been negatively exposed to persistently higher inflation. The bank said most of the Russian exposure was in its investment banking division as well as its asset management business.

In a call with reporters, JPMorgan Chief Financial Officer Jeremy Barnum said most of the Russian write downs were “name specific” Russian companies and assets, as well as some Russian-related derivatives.

JPMorgan is the first of Wall Street big banks to report their results for the first quarter. Analysts expect Wall Street will report a modest, but noticeable, hit to its profits as banks individually report their exposure to Russia. JPMorgan had a modest business in Russia. Citigroup, which had both an investment bank and a consumer banking business, will report its results on Thursday.

Dimon said JPMorgan is optimistic in the short-term about the U.S. economy and consumer spending.

Dimon has said publicly that he believes the U.S. consumer is in the best shape he’s seen in his career. Delinquencies are low and wages are rising, which should make it easier for consumers to pay their debts. JPMorgan’s consumer banking division saw credit card users spend more on their cards, and noticed a jump in travel and entertainment spending as well.

The volatility in markets the first three months of the year due to Russia’s invasion as well as inflation also negatively impacted the bank’s trading desks. JPMorgan’s corporate and investment bank posted a 26% decline in profits from a year earlier. Investment banking revenue and fees dropped sharply, as companies put deals on hold. Stock and bond trading revenues also declined.

JPMorgan shares were down more than 3% in early trading.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Haitian migrant Gerson Solay, 28, carries his daughter, Bianca, as he and his family cross into Can...
Associated Press

US, Canada to end loophole that allows asylum-seekers to move between countries

President Joe Biden and Canadian Prime Minister Justin Trudeau on Friday announced a plan to close a loophole to an immigration agreement.
2 days ago
Expert skateboarder Di'Orr Greenwood, an artist born and raised in the Navajo Nation in Arizona and...
Associated Press

Indigenous skateboard art featured on new stamps unveiled at Phoenix skate park

The Postal Service unveiled the “Art of the Skateboard" stamps at a Phoenix skate park, featuring designs from Indigenous artists.
2 days ago
(Facebook Photo/City of San Luis, Arizona)...
Associated Press

San Luis authorities receive complaints about 911 calls going across border

Authorities in San Luis say they are receiving more complaints about 911 calls mistakenly going across the border.
8 days ago
(Pexels Photo)...
Associated Press

Daylight saving time begins in most of US this weekend

No time change is observed in Hawaii, most of Arizona, Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam and the Northern Marianas.
16 days ago
Mexican army soldiers prepare a search mission for four U.S. citizens kidnapped by gunmen in Matamo...
Associated Press

How the 4 abducted Americans in Mexico were located

The anonymous tip that led Mexican authorities to a remote shack where four abducted Americans were held described armed men and blindfolds.
16 days ago
Tom Brundy points to a newly built irrigation canal on one of the fields at his farm Tuesday, Feb. ...
Associated Press

Southwest farmers reluctant to idle farmland to save water

There is a growing sense that fallowing will have to be part of the solution to the increasingly desperate drought in the West.
23 days ago

Sponsored Articles

Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Desert Institute for Spine Care photo)...

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
JPMorgan profits drop 42%, bank writes down Russian assets