JPMorgan profit falls 42% on slowdown in deals, trading

JPMorgan profit falls 42% on slowdown in deals, trading © Reuters. FILE PHOTO: A J.P. Morgan logo is seen in New York City, U.S. January 10, 2017. REUTERS/Stephanie Keith/File Photo

(Reuters) -JPMorgan Chase & Co reported a fall in first-quarter earnings on Wednesday, hurt by a slowdown in dealmaking brought on by the Ukraine conflict and a decline in trading revenue.

Investment banking revenue for big banks stalled after the Russian invasion of Ukraine in late February. In the first quarter, the total value of pending and completed deals amounted to about $900 billion by March 29, the lowest since the second quarter of 2020, according to Refinitiv data.

The lender also said its board approved a share buyback plan of $30 billion.

The largest U.S. lender, whose fortunes are often seen as a barometer of the health of the economy, posted a profit of $8.28 billion, or $2.63 per share, in the quarter ended March 31, compared with $14.3 billion, or $4.50 per share, a year earlier.

Analysts on average had expected earnings of $2.69 per share, according to Refinitiv. It was not immediately clear if the reported numbers were comparable to estimates.

The big U.S. banks are reporting results at a time when inflation is at its highest in decades, which could lead the Federal Reserve to hike interest rates more aggressively this year.

While that is good for big lenders like JPMorgan (NYSE:JPM), rapid rate hikes could slow down the economy and scupper a nascent recovery from the pandemic.

Net reported revenue fell to $30.72 billion from $32.27 billion a year earlier.

Other large U.S. banks including Citigroup (NYSE:C), Wells Fargo (NYSE:WFC) and Goldman Sachs (NYSE:GS) will report results on Thursday, while Bank of America (NYSE:BAC) reports results next Monday.

In the same quarter a year earlier, banks had benefited from exceptionally strong dealmaking and trading and the release of funds set aside for loan losses.