JPMorgan kicked off the US bank earnings season reporting a 42% drop in its Q1 2022 net profits to $8.3bn. Net revenues fell 5% to $31.6bn. The drop in profits came after $1.5bn in provisions were made for credit losses were. The bank took a $902mn charge on credit reserves for anticipated loan losses vs. a $5.2bn release in the year ago period. The bank also booked $524mn in losses due to markdowns and widening spreads after “adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from Russia-associated counterparties”. On the consumer banking side, net income was $2.9bn, down 57% while corporate and investment banking net income was $4.4bn, down 26%. Investment banking revenue was $2.1bn, down 28%, driven by lower fees, down 31%. JPMorgan CEO Janie Dimon said, that the higher credit provisions were because of “higher probabilities of downside risk… We remain optimistic on the economy, at least for the short term… but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine”.
JPMorgan’s bonds were trading steady with its 4% Perp up 0.2 points to 94.44, yielding 6.09%.