JPMorgan profit plunges on coronavirus loan provisions
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[April 14, 2020] (Reuters)
- JPMorgan Chase & Co's <JPM.N> quarterly
profit slumped by more than two-thirds as the coronavirus pandemic and
record low oil prices forced the largest U.S. bank to boost reserves to
protect it from a wave of potential loan defaults.
Provision for credit losses jumped over five-fold to $8.3 billion in the
first quarter, with two-thirds of the additional credit reserves taken
for consumer loans.
"Given the likelihood of a fairly severe recession, it was necessary to
build credit reserves," JPMorgan Chief Executive Officer Jamie Dimon
said in a statement.
Dimon had warned shareholders last week that the coronavirus crisis
would hurt profits "meaningfully" through 2020.
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The pandemic has shut down businesses, put nearly 10 million people out
of work in the United States alone and is expected to cause a global
recession not seen in generations.
The bank's net income fell to $2.87 billion, or 78 cents per share, in
the quarter ended March 31, compared with $9.18 billion, or $2.65 per
share, a year earlier.
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A J.P. Morgan logo is seen in New York City, U.S. January 10, 2017.
REUTERS/Stephanie Keith
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Analysts on average had expected $1.84 per share, according to Refinitiv. It was
not immediately clear if the reported numbers were comparable with estimates.
Profit was also hurt by a $951-million charge in its investment bank due to a
markdown on the bank's bridge book.
There have so far been more than 1.8 million reported cases of COVID-19, the
deadly respiratory disease stemming from the virus, and 115,242 deaths,
according to a Reuters tally.
(Reporting by Anirban Sen in Bangalore and Elizabeth Dilts-Marshall and David
Henry in New York; Editing by Saumyadeb Chakrabarty and Lauren Tara LaCapra)
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