new York JP Morgan started the US banks’ accounting season on Thursday. Higher provisions for impending loan losses due to the increasing risk of recession weighed on the big bank’s profit in the second quarter (Q2).
The largest US bank posted a surplus of $8.6 billion for the three-month period ended June. A year earlier it was $ 11.9 billion, as the institute announced on Thursday. That is a minus of 27.7 percent. Earnings per share were $2.76, up from $3.78 a year ago.
America’s industry leader booked a total of $1.1 billion in provisions for impending loan defaults. A year earlier, the bank had dissolved around three billion dollars in risk provisions. Net income increased 1 percent to $30.72 billion.
CEO Jamie Dimon warned that geopolitical tensions, high inflation, falling consumer confidence and the war in Ukraine are all likely to have a negative impact on the global economy.
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Easing merger fever drives Morgan Stanley profits down
The US money house Morgan Stanley suffered a business slump in investment banking in the second quarter and earned significantly less. Net income fell by around 30 percent year-on-year to $2.4 billion, Morgan Stanley said on Thursday. Earnings fell 11 percent to $13.1 billion. Analysts had expected better numbers. The share initially reacted with price losses before the market.
The brisk activity on the stock exchanges, where many investors adjusted their portfolios in the face of fears of inflation and recession, allowed trading in shares and bonds to flourish. But investment banking revenues — which include fees for servicing IPOs and mergers — plummeted 55 percent.
Wealth management also weakened. In addition, Morgan Stanley set aside $200 million due to an investigation by US regulators into unauthorized dealer chats.
Citigroup and Wells Fargo will release their second-quarter results on Friday, and Goldman Sachs and Bank of America on Monday.
Analysts expect Citigroup’s earnings to fall 38 percent in the quarter, Wells Fargo’s earnings to fall 42 percent and Bank of America’s earnings to fall 29 percent. According to analyst estimates, the investment bank Goldman Sachs could even report a drop in earnings of 51 percent.
How Deutsche Bank performed in the second quarter should become clear on July 27th. Then the German industry leader will publish its interim report.
More: Groups from other sectors in the USA will also be presenting their Q2 figures in the coming days