JPMorgan, Citi profits improve

Signs of recovery seen, but banks say stimulus package needed.

CHARLOTTE, NORTH CAROLINA — Two of the nation’s biggest banks, JPMorgan Chase and Citigroup, said Tuesday their profits improved markedly over the summer, as the U. S. economy tried to bounce back from coronavirus shutdowns that were imposed earlier this year.

Even so, both banks warned that much uncertainty remains about where the U. S. economy is headed, and top bank executives bluntly said there is a need for another economic stimulus package to keep the economy from slipping into recession again.

“Agood, well- designed stimulus package will simply increase the chancewe get better outcomes,” said JPMorgan’s Chairman and

CEO Jamie Dimon.

Both Citi and JPMorgan set aside fewer funds to cover potentially bad loans, contributing to the improvement in their third- quarter results. These loanloss reserves, as they are known, are funds banks put aside when borrowers stop paying on their loans or there are economic signals that show a potential for more loans to go bad.

In the first months of the pandemic, banks set aside tens of billions

of dollars to guard against bad loans as state and local economies came to a halt and millions of workers were laid off. Citi itself reserved about $ 15 billion over the first two quarters of 2020.

But in the third quarter, many cities and states started reopening their economies in phases. Many economic indicators have markedly improvedsince thepandemic shutdowns of April andMay. For instance, unemployment, albeit still high, is down from historic records earlier in the year.

This has led a good number of investors and economists to predict that — at least economically — the worst is over when it comes to the pandemic.

AP 2014 JPMorganChase says profits improvedmarginally in the third quarter, a notable change after the nation’s largest bank had to set aside billions in the past two quarters to cover losses fromthe pandemic.