JPMorgan's earnings showed its credit reserves increased by $6.8 billion from the prior year, 56% of which was set aside for its consumer Card division.
showed its credit reserves increased by $6.8 billion from the prior year, 56% of which was set aside for its consumer card division.
"In the first quarter, the underlying results of the company were extremely good, however given the likelihood of a fairly severe recession, it was necessary to build credit reserves of $6.8B, resulting in total credit costs of $8.3B for the quarter," CEO Jamie Dimon said in theOf the $6.8 billion, more than half — or $3.8 billion — is earmarked for the bank's Card division. In total $4.4 billion is allocated for consumer finance, with the remaining $2.
As of March 31 the allowance for credit losses in the bank's Card unit stood at $15 billion, which is more than half of the bank's firmwide reserves of $25.4 billion. The firm cited the "deterioration in the macro-economic environment" caused by the coronavirus pandemic as the primary reason for beefing up its reserves.
For the quarter JPMorgan posted earnings per share earnings of 78 cents, a figure that missed analysts' $1.84 estimate. JPMorgan's profit of $2.87 billion plunged 69% from a year earlier, driven mostly by the credit provisions, while revenue proved to be more resilient, slipping 3% from a year earlier to $29.07 billion.for exclusive insights and analysis, and live business day programming from around the world.
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