JPMorgan Chase & Co. chief executive Jamie Dimon announced that the bank generated $4.7 billion of net income in the second quarter of 2020, its “highest quarterly revenue ever.”
JPMorgan, the largest American bank with total assets of roughly $2.7 trillion, beat expectations — including its own second quarter forecast — on trading revenue due to higher market volatility and actions taken by the Federal Reserve in order to support credit markets, CNBC reported.
“We are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm,” Dimon said in a press release.
In response to the coronavirus pandemic, JPMorgan reported that it set aside $10.47 billion to cover credit costs and built a credit reserve of $8.9 billion. (RELATED: JP Morgan Finds Infection Rates Are Decreasing In States That Ended Lockdowns)
While other major American banks like Wells Fargo and Citigroups reported quarterly losses, JPMorgan was able to generate a profit due to a stronger loss-absorbing capacity, according to NPR.
Dimon specifically cited the firm’s $34 billion credit reserves and $1.5 trillion total liquidity resources as the reason JPMorgan was able to absorb losses in the second quarter. “This is why we can continue to serve all of our stakeholders and to pay our dividend — unless the economic situation deteriorates materially and significantly,” he said in the press release.
An estimate from the Congressional Budget Office released in June stated that coronavirus would remove roughly $7.9 trillion of economic activity from the U.S. over the next decade. Through the 2030 fiscal year, the effects of the pandemic would see economic output shrink by 3%, CNBC reported.
“Despite some recent positive macroeconomic data and significant, decisive government action, we still face much uncertainty regarding the future path of the economy,” Dimon stated in the press release. He also added that JPMorgan was committed to “helping the economies of the world recover from the impact of the ongoing COVID-19 crisis.”