Apr 13, 2022 - Economy

JPMorgan increases reserves, citing 'higher probabilities of downside risk'

JPMorgan Chase stock price
Data: Yahoo Finance; Chart: Simran Parwani/Axios

The country’s biggest bank is bracing for more uncertainty while hoping for the best.

Driving the news: JPMorgan Chase set aside $902 million in new money, called reserves, to cover losses from loans in case borrowers are unable to pay, the company reported today.

  • Why it matters: It's the bank’s first increase in reserves since the depths of the pandemic. And though the number represents a tiny fraction of the bank's total loan portfolio, the move reflects growing recession worries and the still uncertain fallout from Russia’s invasion of Ukraine, Bloomberg notes.

Flashback: A year ago, when the economy roared back to life, the bank released $5.2 billion in loan-loss reserves that it had set aside.

What they’re saying: When asked on this morning's earnings call if he thought the U.S. will see a recession this year based on everything he knows, CEO Jamie Dimon responded, “I don’t. But … I can’t forecast the future any more than anyone else.”

  • Dimon continued by saying he hopes the U.S. will find a “soft landing” and that the war in Ukraine is resolved. 
  • “I just wouldn’t bet on all that.”

What to watch: Peer banks Goldman Sachs, Citigroup, Morgan Stanley and Wells Fargo are set to issue their earnings reports tomorrow.  

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