Major US banks delivered strong results at the end of 2022, propelled by higher prices and market volatility, but they expected the economy to deteriorate and allocated more funds to deal with potential defaults.
And the largest of them, “JP Morgan Chase”, considers that the most likely scenario is a “moderate recession” starting from the last quarter, while “Citigroup” and “Bank of America” indicated the possibility of a “deterioration” in economic prospects, and “Wales” expected Fargo said the economic environment was “less favorable”.
In preparation for the possibility that their customers might not be able to pay their debts, banks have built up their reserves by $1.4 billion at JPMorgan Chase, $640 million at Citigroup, $403 million at Bank of America and $397 million at Wells Fargo.
Meanwhile, banks continued to reap profits, albeit at times less than achieved in 2021.
Thus, net profit in the fourth quarter increased by 6 percent to $ 11 billion in “JP Morgan Chase” and by 2 percent to $ 6.9 billion in “Bank of America”.
But it fell 21 percent to $2.5 billion at Citigroup and 50 percent to $2.9 billion at Wells Fargo.
JPMorgan CEO Jamie Dimon said the US economy remains “strong now, with consumers continuing to spend their money and businesses in good shape.”
He emphasized that the negative effects of the Covid pandemic continue to fade. But he stressed that there were still many uncertainties regarding the “end effects” of geopolitical tensions such as the war in Ukraine, the fragility of energy and food markets, inflation and the key rate hikes initiated by the US Federal Reserve.
Dimon stressed that the bank will remain “vigilant and prepared for all possibilities.”
