Jamie Dimon is preparing America’s biggest bank for some very rainy days ahead.
The chief executive of JPMorgan Chase said he sees the economy worse before they get better on Tuesday after his bank reported its profits fell nearly 70 percent in the first quarter of 2020 as the coronavirus ravaged the US economy, forcing him to set aside almost $6.8 billion in anticipation of massive loan defaults as restaurants and other small businesses remain shuttered.
“In the first quarter, the underlying results of the company were extremely good, however, given the likelihood of a fairly severe recession, it was necessary to build credit reserves of $6.8B,” Dimon wrote on a note accompanying the results.
JPMorgan’s earnings per share of 78 cents fell well short of the $1.84 analyst estimate. And the bank’s quarterly profit of $2.87 billion was hit hard by the huge reserve, causing the precipitous drop of more than two-thirds compared to the first quarter of 2019.
The pandemic was felt on almost every line of JPMorgan’s financial results, with only asset management and some trading desks escaping the carnage.
But the 64-year-old Dimon, who underwent emergency heart surgery on March 5 and returned to the helm of the $2.6 trillion megabank on April 2, did strike a somewhat sanguine tone when it came to the US economy’s longer-term post-COVID reality.
Dimon and JPMorgan’s chief financial officer Jennifer Piepszak made it clear in their comments to reporters that they foresee a significant bounceback in the second half of 2020, but were cautious about how high that bounce would be.
“You’ll open it up in safe way,” Dimon said in response to a question about when the economy would reopen. “The sooner the better, but its gotta be safe for everybody.”
When pressed on the perception that President Trump was slow to move on the coronavirus outbreak, Dimon demurred.
“I’m hoping as a society, we can stop pointing fingers and see how we can be better,” mused the politically savvy CEO. “You wanna be positive? One of the great things about America is our resiliency and maybe this a chance to make our society better.”
And when prompted to criticize Trump’s increasingly controversial White House briefings, Dimon made it clear he was not interested, saying curtly “I’m not going to comment on anything political on this call.”
But Dimon was more comfortable commenting on his own future. When asked how his emergency near-death experience changed his perspective on when to end his almost 15-year reign at JPMorgan, Dimon was characteristically blunt.
“It hasn’t changed my perspective at all,” he said.