JP Morgan amasses reserves in Q1 ahead of 'fairly severe recession'

JP Morgan posted "extremely good" underlying results for the first quarter of 2020, although its bottom line took a multi-billion dollar hit as America's largest lender by market value amassed reserves in anticipation of a "fairly severe recession".

“The first quarter delivered some unprecedented challenges and required us to focus on what we as a bank could do - outside of our ordinary course of business - to remain strong, resilient and well-positioned to support all of our stakeholders," JP Morgan chief, Jamie Dimon, said.

In particular, Dimon highlighted the bank's 11.5% common equity Tier 1 ratio and $1trn in total liquidity resources.

For the three months ending on 31 March, the bank reported a 69% drop in net profits to reach $2.87bn or 78 cents (consensus: $2.18), as it hiked reserves by $6.8bn for total credit costs during the period of $8.3bn.

The lender's managed revenues meanwhile shrank by just 2.6% to $29.07bn (consensus: $29.55bn) while net interest income, which was flat on a year ago at roughly $14.5bn, beat the analyst consensus compiled by Factset for $14.0bn.

Revenues from its Consumer and Community banking arm fell 2.4% to $13.17bn, while at its corporate and investment banking unit it declined 0.9% to $9.95bn.

Within C&I, equity markets revenue soared by 28% to $2.2bn and that from fixed income surged 34% to $5.0bn.

As of 1228 GMT, shares of JP Morgan were 0.58% higher at $98.71.