JPMorgan Chase just disclosed that rising job losses effectively wiped out most of its profit in the first quarter and things may get far worse, the bank’s finance chief warned.
The bank said early Tuesday that it added a whopping $6.8 billion to reserves for loan losses in the quarter, meaning that it expects a surge in defaults across its sprawling retail and commercial lending operations.
But that increase, the largest JPMorgan has taken since the financial crisis, was based on an assumption that U.S. unemployment would be around “10%-plus” in the second quarter, CFO Jennifer Piepszak told reporters during a conference call.
“The latest view from our economists is that unemployment will hit 20% in the second quarter and recover in the back half of the year,” Piepszak said Tuesday.
