JPMorgan Chase announced Thursday that its second-quarter profit slumped as it built a reserve for bad loans of $428 million and suspended share buybacks. Chairman and CEO Jamie Dimon have become more cautious in his approach due to these actions. “The U.S. economy continues to grow and both the job market and consumer spending, and their ability to spend, remain healthy,” he said in the earnings release. “But geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices are very likely to have negative consequences on the global economy sometime down the road,” he warned.
Accordingly, JPMorgan has decided to “temporarily” suspend its share repurchase program to meet regulatory capital requirements, a prospect that analysts feared earlier this year. The bank was forced to maintain its dividend last month while its competitors increased theirs. Shares of JPMorgan fell nearly 5% in trading Thursday, hitting a fresh 52-week low. Shares of JPMorgan fell nearly 5% in trading Thursday, hitting a fresh 52-week low. As a result of the reserve build, the company’s profit declined 28% from a year earlier to $8.65 billion, or $2.76 per share, JPMorgan said in a statement. A year ago, the bank benefited from a reserve release of $3 billion. Managed revenue edged up 1% to $31.63 billion, helped by the tailwind of higher interest rates, but was still below analysts’ expectations, according to a Refinitiv survey. It was just the second time JPMorgan missed on both profit and revenue since 2020.