JPMorgan Says U.S. Consumers Are Doing Just Fine

- Advertisement -

The leaders of America’s largest bank expect credit losses to remain low due to higher cash balances

- Advertisement -

“Big picture, the near-term credit outlook, especially for the US consumer, remains strong,” said Chief Financial Officer Jeremy Barnum.

- Advertisement -

Bank stocks soared Monday, outpacing the broader market. JPMorgan shares were up about 7% midday, while the KBW Nasdaq Bank Index rose 4%. Recession fears have driven a selloff in bank stocks this year.

Chief Executive Jamie Dimon said a recession isn’t out of the cards. The economy remains strong due to the actions Congress and the Federal Reserve took early on in the pandemic to prop it up, he said, and that is making it harder to see what’s ahead.

- Advertisement -

“It’s a different strong economy,” Mr. Dimon said. “If we go into a recession, it may be different from other recessions.”

So far, though, JPMorgan executives said they have seen no signs of looming trouble in early loan-delinquency numbers. And while the economic forecast has worsened, they aren’t expecting to add significantly to their loan-loss reserves in the current quarter after surprising markets by setting aside more money to cover potential losses earlier this year.

Executives cautioned that lower-income consumers, who make up a smaller slice of its customer base, are starting to feel the effects of red-hot inflation. Indeed, more consumers with low credit scores are falling behind on payments for car loans, personal loans and credit cards. Delinquencies on subprime car loans and leases hit an all-time high in February, according to credit-reporting firm Equifax Inc.

Still, JPMorgan is confident enough in consumers’ financial health to roll out new credit products. Executives detailed new “buy now, pay later” installment plans for its credit- and debit-card customers. The bank is also ramping up wealth-management offerings.

While JPMorgan’s consumer business remains in good shape, the outlook is cloudier for its Wall Street operations.

Daniel Pinto, JPMorgan’s president and the head of its corporate and investment bank, said fees from investment banking are trending down 45% for the second quarter from a record stretch a year earlier due to a decline in corporate deal making and stock offerings. Rocky markets, though, have been good for the bank: Trading revenues are likely to rise 15% to 20% in the quarter.

Write to David Benoit at [email protected]


Credit: /

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox