JPMorgan Chase (JPM) reported a decline in its first-quarter earnings due to a slowdown in
dealmaking and a decline in trading revenue.
The largest U.S. bank with more than $3 trillion U.S. of assets under administration, JPMorgan
said its investment banking revenue stalled after Russia invaded Ukraine in late February.
In the first quarter, the total value of pending and completed deals at JPMorgan amounted to
about $900 billion U.S., the lowest level since the second quarter of 2020, according to Refinitiv
data.
The lender, whose fortunes are often seen as a barometer of the health of the American
economy, posted a Q1 profit of $8.28 billion U.S., or $2.63 U.S. per share, in the quarter ended
March 31, compared with $14.3 billion U.S., or $4.50 U.S. per share, a year earlier.
Analysts on average had expected earnings of $2.69 U.S. a share, according to Refinitiv data.
JPMorgan’s revenue fell to $30.72 billion U.S. from $32.27 billion U.S. a year earlier.
In the same quarter of 2021, banks benefited from exceptionally strong dealmaking and trading,
as well as the release of funds set aside for loan losses during the pandemic.
Other large U.S. banks including Citigroup (C), Wells Fargo (WFC) and Goldman Sachs (GS)
report results on April 14, while Bank of America (BAC) reports results on April 18.
The big U.S. banks are reporting results at a time when inflation is at its highest level since
1981, which could lead the U.S. Federal Reserve to hike interest rates more aggressively in
coming months.
While higher interest rates are good for lenders such as JPMorgan, rapid rate hikes could slow
down the economy and derail a recovery from the pandemic.
In announcing its first quarter results, JPMorgan Chase also said that its board of directors has
approved a $30 billion U.S. share buyback program.