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JPMorgan profit jumps almost 400% in first quarter after releasing reserves for provisions

By Anirban Sen and Elizabeth Dilts Marshall

Apr 14 (Reuters) – JPMorgan Chase & Co’s profits soared nearly 400% in the first quarter and far exceeded market estimates on Wednesday, after the largest U.S. bank released more than $ 5 billion of its reserves as a provision for bad debts during the coronavirus emergency.

The bank, widely regarded as a barometer of the health of the US economy, said consumer spending on their businesses had returned to pre-pandemic levels and was up 14% compared to the first quarter of 2019.

The results, helped by favorable comparisons with the same period last year, also benefited from a 57% jump in investment banking revenues.

While JP Morgan suffered a drop in earnings last year from the economic effects of the pandemic, investors are optimistic that it will return to normal in 2021, with a recovery supported by the $ 1.9 trillion stimulus plan. of President Joe Biden and in the distribution of vaccines against COVID-19.

“We believe that the (US) economy has extremely robust growth potential for several years,” said the company’s chief executive, Jamie Dimon, in a statement. “Our credit reserves of $ 26 billion are appropriate and prudent, all things considered.”

The bank’s net earnings rose to $ 14.3 billion, or $ 4.50 per share, in the quarter ended March 31; from $ 2.9 billion, or 78 cents per share, reported in the same period in 2020.

Analysts, on average, expected earnings of $ 3.10 per share, according to Refinitiv.

Revenues soared 14% to $ 33.1 billion.

JPMorgan changed its outlook for the year, arguing that its expenses would be higher than anticipated and that net profits will decline. Income expenses rose in the first quarter, but interest rates remained at record lows.

The bank’s shares fell 0.7% in operations prior to the opening of the stock exchange in New York.

(Reports by Anirban Sen and Elizabeth Dilts. Edited in Spanish by Marion Giraldo)

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