JPMorgan profit drops on bigger provisions for loan losses

JPMORGAN Chase’s profit dropped in the third quarter as it built up provisions for potential loan defaults, the bank said on Friday (Oct 11).

Profit was US$12.90 billion for the three months ended Sep 30, compared with US$13.15 billion a year ago.

The lender set aside US$3.11 billion as provisions for credit losses, compared with US$1.38 billion a year earlier.

Banks are building up provisions – which act as a safeguard when borrowers default on their loans – to typical levels as consumers deplete the savings they built up during the pandemic.

Consumers’ financial health remains solid despite elevated interest rates and fears over unemployment. REUTERS