On Friday, a very serious and presidential (or maybe finance minister) Jamie Dimon said seriously about the coronavirus: "I don't expect normality until the summer of 2021. We will have to live with it." And by “we” he means everyone else, of course, because JPMorgan Chase seems to have the pandemic firmly in the rearview mirror, and not just in the sense that people are back to work and definitely dealing with the big questions of the future.
The bank provided only $ 611 million for potential future credit losses, far less than expected and the $ 10.47 billion it booked in the second quarter. The profit has doubled compared to the second quarter.
The bank's earnings rose to $ 9.44 billion, or $ 2.92 per share, from $ 9.08 billion, or $ 2.68 per share last year. According to FactSet, analysts had expected USD 2.23 per share…. If the economy recovers quickly, JPMorgan could have $ 10 billion more than it needs to cover acidic loans, Dimon said.
And not so happy with everyone else? It is the bank that will soon be led by Mike Corbat, whose profits have caused the opposite of growth and which has had to put aside multiples of its own existential costs to cover the looming credit losses.
Citigroup Inc. announced on Tuesday that third-quarter earnings fell 34%. The bank continues to prepare for a coronavirus-induced recession. The bank slowed the bulwark on its loan portfolio and made provisions for loan losses of $ 2.26 billion during the quarter. The last two quarters each set aside more than $ 7 billion.
It doesn't sound like Corbat has much hope of a triumphant swan song in his upcoming final winning season either.
Consumer bank revenues fell as people continued to struggle through the recession and lower interest rates weighed on lending profit margins. The bank's outlook for the US economy next year deteriorated as it forecast higher unemployment and a slower GDP recovery than expected in July. The return on tangible capital, a measure of profitability that investors are closely watching, fell from 12.2% a year ago to 7.9%, but improved from the second quarter. The bank had set a goal of hitting 13.5% this year, which would have matched the metric better with the competition before lowering the target and then pulling everything together.
JPMorgan Earnings Up 4%, a Surprising Show of Coronavirus Resilience (WSJ)
Citigroup's profit drops 34% as more money is available for bad credit (WSJ).