(Reuters) – JPMorgan Chase said on Friday it had increased its provisions to $1.4 billion (1.30 billion euros) in anticipation of a mild recession, after posting a quarterly profit that beat expectations, thanks to the good performance of its trading division.
Consumers continue to spend excess cash and business operations remain thriving, Chief Executive Jamie Dimon said, noting however a number of uncertainties for the economy.
“We still don’t know the ultimate effect of headwinds coming from geopolitical tensions, including the war in Ukraine, the vulnerable state of energy and food supplies, persistent inflation…and unprecedented quantitative tightening.” , he said.
The title JPMorgan lost about 3% in pre-market trading.
The bank reported a slight deterioration in its macroeconomic outlook.
The bad patch in which its investment bank finds itself continued during the quarter, with a 57% fall in turnover, as company executives braced for a possible recession instead.
Trading revenue, however, benefited from market volatility as investors shifted their positions to cope with a high interest rate environment.
Trading revenue increased by 12%. That of securities transactions, on the other hand, remained relatively stable, the bank said.
JPMorgan’s profit for the three months ended Dec. 31 was $11 billion, or $3.57 per share, from $10.4 billion ($3.33 per share) a year earlier.
Excluding special items, the bank posted earnings of $3.56 per share for the period, beating analysts’ estimates of $3.07.
(Reporting Niket Nishant in Bangalore; French version Dagmarah Mackos, editing by Kate Entringer)