JPMorgan’s profit for April, May and June fell to $4.7 billion, just under half of what it earned a year earlier, even as its revenue came in at nearly $34 billion — a record and up from just over $29 billion in the second quarter of 2019.
The bank set aside nearly $11 billion to the pool of money it keeps ready to cover any losses, $9 billion more than last year, bringing its total credit reserves to near $34 billion. Of the new addition to the reserves, almost $6 billion was designated to handle losses on loans to consumers, including credit cards.
But the bank also reported a boom in Wall Street business, including the fees it collects from trading in stocks, bonds and other financial instruments. Its revenue from trading in currencies, derivatives, government debt and other products that fall under an umbrella known as “fixed income” fairly doubled from the same period last year.
Citigroup earned $1.3 billion during the second quarter, compared with nearly $5 billion a year earlier. It sent an additional $5.6 billion to its fund to cover future loan losses triggered by the widespread unemployment caused by the pandemic. Citi’s Wall Street intake also rose slightly from last year, though far more modestly than JPMorgan’s.
Wells Fargo, which relies far less on Wall Street for its earnings, lost $2.4 billion as the pandemic’s economic shocks ravaged nearly every line of its business.
The bank added $8.4 billion to its reserve for loan losses, more than twice what it set aside last quarter. Revenue for the second quarter was $17.8 billion, down nearly 18 percent from a year earlier. Last year, it earned $6.2 billion during the quarter.
“While the negative impact of the pandemic is unprecedented and many of our business drivers were negatively impacted, our franchise should perform better,” Mr. Scharf said in a statement. “We will make changes to improve our performance regardless of the operating environment.”
Wells Fargo also said it would, for the first time since the Great Recession, cut its dividend this quarter, dropping its payments to investors to 10 cents a share from the 51 cents it paid for the last few quarters. It is the only bank to cut its dividend so far. JPMorgan announced on Tuesday that it would leave its dividend payment unchanged and that it had given out $3 billion to investors this year.