Q1 provision for credit losses soar to $8.29 billion, up by 339%
- Q1 adjusted revenue $29.07 billion (-2.6% y/y)
- Q1 equities sales and trading revenue $2.24 billion vs $$2.05 billion estimate
- Q1 FICC sales and trading revenue $4.99 billion vs $4.11 billion
The bank's CEO Jamie Dimon is out with a remark that you'd never want to hear from a financial institution: "We remain well captailised and highly liquid".
When those words are uttered out, it's never really a good sign of what is happening - or perhaps I'm just being too much of a cynic.
Headline earnings is terrible but the jump in provision for credit losses is something that stands out in my view. The only positive I see in this is that when they set aside such provisions, it means that they won't have to boost reserves that much in the coming quarter.
Even so, the bank announced a $6.8 build in reserves for Q1 due to the coronavirus impact, bringing the firm-wide total to $25.4 billion and are expected to build reserves further. This is all to brace for the impact of consumer credit losses amid the lockdown.
Dimon says that they have lent over $500 million to smaller firms and remains quite upbeat, as trading revenue beat out estimates quite handily.
