JPMorgan sets aside money for bad debts as ‘mild recession’ looms
Main Points
- Here’s what the company reported: Earnings of $3.57 per share, which isn’t comparable to the $3.07 estimate, according to Refinitiv.
- Revenue of $35.57 billion vs $34.3 billion estimate.
- JPMorgan Chase on Friday reported fourth-quarter earnings and sales that beat expectations as the bank’s interest income rose 48% on higher rates and credit growth.
- Earnings of $3.57 per share, exceeding estimate of $3.07 net of non-recurring items, according to Refinitiv.
- Revenue of $35.57 billion versus an estimated $34.3 billion.
- The New York-based bank said earnings were up 6% year-over-year to $11.01 billion, or $3.57 per share.
- Revenue increased 17% to $35.57 billion, driven by an increase in net interest income to $20.3 billion, beating StreetAccount’s estimate by $1 billion as the bank saw an average 6% increase in lending.
- StreetAccount estimate of $1.96 billion as funds were set aside for expected defaults. The company’s shares rose 1.1%.
- The move was prompted by a “slight deterioration in the company’s macroeconomic outlook, now reflecting a mild recession at its core,” as well as credit growth from customers using its Chase credit cards, the bank said.
- The recession, in which US unemployment could hit 4.9 percent, is what economists at JPMorgan are expecting in the fourth quarter of this year, Chief Financial Officer Jeremy Barnum told reporters during a media call on Friday.
- While JPMorgan CEO Jamie Dimon said on Friday that the US economy “remains strong at this time” thanks to well-funded consumers and businesses, he pointed to a number of risks to that outlook.
- Quantitative tightening refers to actions taken by central banks to reduce their balance sheets by halting or reversing previous asset purchase programs. JPMorgan, the largest US bank by assets, is being closely watched for clues as to how the industry is managing an economy at a crossroads.
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