JPMorgan Chase profits slide as it sets aside $8.9bn for bad loans

NEW YORK: JPMorgan Chase set aside another $8.9 billion for bad loans in the second quarter following the upheaval of the coronavirus as it reported on Tuesday a steep drop in profits.

Net income fell 51 percent to $4.7 billion, translating into earnings-per-share that topped analyst forecasts.

Revenues jumped 15 percent to $33.8 billion, its highest ever for a quarter.

JPMorgan pointed to strength in its trading and investment banking divisions that it said offset weakness in consumer divisions.

The reserves taken in the second quarter were greater than in the first quarter, reflecting the choppy nature of the economic recovery following coronavirus closures earlier in the year that sharply slowed activity.

The biggest reserves additions were in consumer banking, mostly in credit cards.

The results come on the heels of actions by California, Texas and other states to halt or roll back the reopening of their economies due to a resurgence of COVID-19 in many states.

"Despite some recent positive macroeconomic data and significant decisive government action, we still face much uncertainty regarding the future path of the economy," said JPMorgan Chief Executive Jamie Dimon.

"However, we are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm."

Dimon said the bank expects to maintain a dividend "unless the economic situation deteriorates materially and significantly."

While the bank reported a loss in consumer and commercial banking, it garnered a big profit increase in its corporate and investment bank division.

The bank reported higher investment fees, while trading revenues soared amid volatility in financial markets.

Shares rose 2.4 percent to $100.08 in pre-market trading.