JPMorgan profits fall 42%

JPMorgan Chase reported a 42 percent drop in first-quarter profits compared to the same period last year, owing in part to the bank’s $1.5 billion write-down of assets due to higher inflation and Russia’s war in Ukraine.

The nation’s largest bank by assets reported a profit of $8.3 billion, or $2.63 per share, down from $14.3 billion, or $4.50 per share, in the previous quarter. According to FactSet, the results fell short of Wall Street analysts’ expectations, who expected JPMorgan to earn $2.72 per share.

JPMorgan Chase Chairman and CEO Jamie Dimon said in a statement that the lender sees “significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine.”

JPMorgan increased its first-quarter earnings a year ago by releasing more than $4 billion in credit reserves linked to the improved economy and the fading COVID-19 outbreak.

JPMorgan and other banks had been distributing funds set aside to cover possibly problematic loans for more than a year. Those releases had greatly increased the banks’ earnings, but investors realized that these gains were just temporary.