AP

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.

AP

The U.S. Supreme Court is seen, Thursday, Feb. 8, 2024, in Washington. The U.S. Supreme Court has h...

Associated Press

Supreme Court decision on Trump’s election status could come Monday morning

A SCOTUS decision could come Monday in the case about whether Trump can be kicked off the ballot over his efforts to undo his 2020 defeat.

3 hours ago

Republican presidential candidate former UN Ambassador Nikki Haley poses for a selfie after speakin...

Associated Press

Nikki Haley wins D.C. Republican primary, her first 2024 victory

Nikki Haley has won the Republican primary in the District of Columbia, notching her first victory of the 2024 campaign.

4 hours ago

An Apache group that has fought to protect land it considers sacred from a copper mining project in...

Associated Press

A US appeals court ruling could allow mine development in central Arizona on land sacred to Apaches

An Apache group that has fought to protect land from a copper mining project in central Arizona suffered a significant blow.

8 hours ago

On Friday, March 1, 2024, the U.S. Food and Drug Administration said yogurt sold in the U.S. can ma...

Associated Press

Eating yogurt may reduce risk of type 2 diabetes, FDA says

Eating at least two cups of yogurt a week might reduce the risk of type 2 diabetes, the U.S. Food and Drug Administration said.

10 hours ago

Arizona will not approve new housing construction on the fast-growing edges of metro Phoenix that r...

Associated Press

Arizona Senate passes plan to manage rural groundwater, but final success is uncertain

A plan to manage rural groundwater passed the Arizona Senate amid concerns about the availability of sufficient water for future generations.

2 days ago

A woman pauses while shopping at a Kohl's store in Clifton, N.J., Jan. 26, 2024. On Thursday, Feb. ...

Associated Press

Federal Reserve’s preferred inflation gauge picked up last month in sign of still-elevated prices

An inflation gauge favored by the Federal Reserve increased in January, the latest sign that the slowdown in U.S. consumer price increases is occurring unevenly from month to month.

3 days ago

Sponsored Articles

...

Midwestern University

Midwestern University Clinics: transforming health care in the valley

Midwestern University, long a fixture of comprehensive health care education in the West Valley, is also a recognized leader in community health care.

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

...

Canvas Annuity

Interest rates may have peaked. Should you buy a CD, high-yield savings account, or a fixed annuity?

Interest rates are the highest they’ve been in decades, and it looks like the Fed has paused hikes. This may be the best time to lock in rates for long-term, low-risk financial products like fixed annuities.

JPMorgan profits drop 42%, bank writes down Russian assets