![]() ![]() ![]() Now, it appears as though the industry has turned a corner and will begin releasing some of those reserves, boosting profit and their ability to repurchase stock this year.ĭimon added that he didn't consider the $2.9 billion reserve release part of the bank's core operating results, but rather the result of calculations that "now involve multiple, multi-year hypothetical probability-adjusted scenarios, which may or may not occur" and which could bring volatility from quarter to quarter. Last year, banks set aside tens of billions of dollars for loan-loss reserves on the expectation that Covid-related shutdowns would force customers large and small to default on loans. "While positive vaccine and stimulus developments contributed to these reserve releases this quarter, our credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty and will allow us to withstand an economic environment far worse than the current base forecasts by most economists," Dimon said in a statement. The firm said it released $2.9 billion from its pile of cash set aside for expected loan defaults in the quarter, resulting in a $1.9 billion boost after about $1 billion in charge-offs. JPMorgan CEO Jamie Dimon cited the two major developments that happened in late 2020 – news of effective coronavirus vaccines and another round of government stimulus – as reasons for taking down his bank's reserves. JPMorgan shares slipped 1.3% after the earnings report. ![]()
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