JPMorgan Chase and Wells Fargo take advantage of crater as they prepare for faults: Coronavirus updates: NPR
Richard Drew / AP
Banks are starting to take the financial impact of job losses and business closures across the country due to the coronavirus.
Two of the nation’s largest banks reported plummeting profits in the first three months of the year as they sought to prepare for a wave of defaults ranging from credit cards and mortgages to loans to businesses.
The country’s largest bank, JPMorgan Chase, said his profit fell 69% because it set aside $ 8.2 billion – the highest amount since 2010 – to prepare for defaults.
The bank is adjusting to what CEO Jamie Dimon has called “a very difficult and unique operating environment”.
Wells Fargo Profits fell 89% for many of the same reasons.
The results “reflected the expected impact these unprecedented times could have on our clients,” CFO John Shrewsberry said in a statement.
Bank profits come under close scrutiny this week, a harbinger of damage to the economy in general and to the financial health of businesses and individuals in the wake of the COVID-19 pandemic.
“Banks see a lot of the country’s economic activity… and therefore have a better idea of the extent of the economic shock,” said Sébastien Galy, senior macro strategist at Nordea Asset Management, in a research note.
Goldman Sachs, Bank of America and Citigroup report their results on Wednesday, and Morgan Stanley will do so later in the week.