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