JPMorgan Chase Chairman Jamie Dimon is as close as Wall Street is to a statesman, and on Friday he sounded the alarm about the global impact of the conflict in Israel and Gaza.
“This could be the most dangerous time the world has seen in decades,” he said in a statement accompanying the bank’s quarterly results. He warned of “far-reaching implications for energy and food markets, global trade and geopolitical relations.”
For Mr. Dimon, dealing with geopolitics is nothing new: He repeatedly warns about the dangers of the war in Ukraine and elsewhere. On Friday he said he was preparing the country’s largest bank for a series of frightening consequences, with other risks including high inflation and rising interest rates. But in a phone call with reporters, he described the Gaza conflict as “the highest and most important thing for the Western world.”
Otherwise, JPMorgan and other major banks appear to be operating smoothly. JPMorgan’s third-quarter profit rose to $13.2 billion, up 35 percent from the same period last year. Bank executives said the tumult of the spring’s regional banking crisis, which led to JPMorgan’s takeover of First Republic, was steadily easing.
“U.S. consumers and businesses remain generally healthy,” Dimon said, “even as consumers draw down their excess cash reserves.”
Wells Fargo also reported profits that exceeded analysts’ expectations: Third-quarter profit was $5.8 billion, up 61 percent year-on-year. But the bank’s chief executive, Charles W. Scharf, warned that he was seeing signs of stress among customers.
Mr. Scharf pointed to the impact of the slowing economy and said borrowers were reducing their loan balances – perhaps good for consumers, but a difficult situation for banks that make money from lending. Losses from bad debts increased “moderately,” he said.
Citigroup’s third-quarter profit rose to $3.5 billion, up 2 percent, slightly higher than expected. “We are truly a bank for all seasons,” the bank’s chief executive, Jane Fraser, said in a statement, adding that each of the bank’s five core business areas reported year-on-year revenue growth.
“The consumer remains quite resilient,” said Mark Mason, chief financial officer at Citi. Payment rates are down slightly and spending is down, although only slightly, he said. Customers continued to spend their card balance more evenly and pay off their card balance more regularly in 2019 than before the pandemic.
“The United States continues to surprise us with its resilience,” he said. A so-called “soft landing” of the economy is becoming increasingly likely, he added.
All banks, Mr. Dimon said, are in regular contact with each other about the possible impact of international conflicts. “We all climb the worry wall a little bit,” he said.