On Friday, a very serious and presidential- (or maybe Treasury secretarial-) sounding Jamie Dimon gravely intoned about the coronavirus, “I don’t expect normality until summer 2021. We’re going to have to live with this.” And by “we,” of course, he means everyone else, because JPMorgan Chase seems to have put the pandemic firmly in its rearview mirror, and not only in the sense that it’s making people come back into work and dealing definitively with the big questions of the future.

The bank set aside just $611 million for potential future loan losses, far less than expected and the $10.47 billion it booked in the second quarter. Profit doubled from the second quarter.

The bank’s profit rose to $9.44 billion, or $2.92 a share, from $9.08 billion, or $2.68 a share, a year earlier. Analysts had expected $2.23 a share, according to FactSet…. If the economy recovers apace, JPMorgan may have $10 billion more than it needs to cover soured loans, Mr. Dimon said.

And among the everyone else not quite so fortunate? Why, it’s the bank soon-to-be-formerly-run by Mike Corbat, whose profit did the opposite of increase and which needed to put several multiples of its own existential cost aside to cover its impending loan losses.

Citigroup Inc. said Tuesday that its third-quarter profit slumped 34%, with the bank continuing to prepare for a coronavirus-induced recession…. The bank slowed the pace of bulwarking for its loan portfolio, taking $2.26 billion of loan-loss provisions in the quarter. It had put more than $7 billion aside in each of the past two quarters.

Nor does it sound like Corbat has much hope for a triumphant swan song in his upcoming final earnings season.

Revenue in the consumer bank fell as people continued to struggle through the recession and lower interest rates hit profit margins on lending…. The bank’s outlook for the U.S. economy next year grew more dire, as it predicted higher unemployment and a slower recovery in gross domestic product than it had expected in July…. Its return on tangible common equity, a measure of its profitability investors watch closely, fell to 7.9% from 12.2% a year ago, though it improved from the second quarter. The bank had aimed to get to 13.5% this year, which would have brought the metric more in line with rivals, before lowering the target and then pulling it all together.

JPMorgan Profit Rises 4%, A Surprising Show of Coronavirus Resilience [WSJ]
Citigroup’s Profit Falls 34% as It Sets Aside More Money for Bad Loans [WSJ]

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By World Economic Forum (Flickr: The Global Financial Context: James Dimon) [CC BY-SA 2.0], via Wikimedia Commons

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