Huge banks put aside billions for potential mortgage defaults

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Huge banks put aside billions for potential mortgage defaults

“This isn't a traditional recession,” CEO Jamie Dimon mentioned, pointing to authorities help applications which have helped enhance earnings and



“This isn’t a traditional recession,” CEO Jamie Dimon mentioned, pointing to authorities help applications which have helped enhance earnings and financial savings for shoppers, in addition to residence costs. “The recessionary a part of this you’re going to see down the highway.”

Nevertheless, the financial institution was boosted by a report quarter for its bond-trading division, which introduced in $7.three billion, doubling its income from the identical interval final yr. That comes because the Federal Reserve has bolstered company debt markets, resulting in a bonanza of bond gross sales over the previous few months.

JPMorgan’s equities division noticed good points, too, posting $2.four billion in income, a 38 % soar.

Wells Fargo, which additionally gave its quarterly replace to traders Tuesday, reported a internet lack of $2.four billion, its first drop in over a decade. It additionally added $8.four billion to its reserves to organize for potential credit score losses. The financial institution slashed its dividend to 10 cents a share.

“We’re extraordinarily disenchanted in each our second quarter outcomes and our intent to cut back our dividend,” CEO Charlie Scharf mentioned in a launch. “Our view of the size and severity of the financial downturn has deteriorated significantly from the assumptions used final quarter.”

In a name with traders, Scharf acknowledged that the Fed’s cap on the financial institution’s development — imposed after a collection of shopper scandals have been unearthed — reduces its alternatives for earnings.

Nonetheless, he mentioned: “We’re liable for the place we’re in” due to previous conduct, including that the corporate’s leaders beforehand hadn’t made “the tough selections vital” to place Wells on a sustainable long-term path.



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