NEW YORK, July 14 (Xinhua) -- U.S. top bank JP Morgan Chase & Co. on Thursday reported lower-than-expected earnings and revenues in the second quarter (Q2) this year as macro headwinds weigh on its operations.
JP Morgan had 8.649 billion U.S. dollars of net income in Q2, down 28 percent year on year, the company said in a release.
The year-on-year drop of profits was "predominantly driven by a net credit reserve build of 428 million dollars compared to a net release of 3 billion dollars in the prior year," said JP Morgan.
The earnings per share in Q2 fell 27 percent year on year to 2.76 dollars, lower than the market expectation of 2.88 dollars.
Meanwhile, JP Morgan's managed net revenue in Q2 expanded 1 percent to 31.63 billion dollars, lower than the market expectation of 31.95 billion dollars.
The U.S. economy continues to grow and both the job market and consumer spending, and their ability to spend, remain healthy, said Jamie Dimon, chairman and chief executive officer of JP Morgan.
Still, Dimon said he has changed his forecast for an economic "hurricane" and the concerns had edged closer with some of the financial dislocations beginning to materialize.
Dimon also warned that 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.
"We are prepared for whatever happens and will continue to serve clients even in the toughest of times," said Dimon in the release.
JP Morgan reported 657 million dollars of net charge-offs and a net reserve buildup of 428 million dollars, "primarily reflecting loan growth as well as a modest deterioration in the economic outlook."
JP Morgan said it has temporarily suspended share buybacks to quickly meet higher requirements.
On Thursday, Morgan Stanley also reported weaker-than-expected profits and revenues in Q2 due to much less revenues from investment banking and trading.
