US banks Jpmorgan, Citi profits improve amid signs of recovery
CHARLOTTE, North Carolina (AP) — Two of the biggest banks in the United States, Jpmorgan Chase and Citigroup, said yesterday that their profits improved markedly over the summer, as the US economy tried to bounce back from the coronavirus shutdowns that were imposed earlier this year.
Even so, both banks warned that much uncertainty remains about where the US 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.
“A good, well-designed stimulus package will simply increase the chance we get better outcomes,” said Jpmorgan’s Chairman and CEO Jamie Dimon in a conference call with reporters.
Both Citi and Jpmorgan set aside fewer funds to cover potentially bad loans, contributing to the improvement in their third-quarter results. that persons can monitor on a daily basis,“Thompson indicated.
When queries were made about the disposal of the 20.1-million Mailpac Group shares at $1.60 on April 3 which lead to a realised loss of approximately $7.6 million, it was revealed that this was done due to Mailpac not being classified in the JSE’S Manufacturing and Distribution index.
“Subsequent to our participation, the JSE advised that Mailpac wouldn’t be a part of the M&D index because it’s classified in a different sector. Given
These loan-loss 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 US$15 billion over the first two quarters of 2020.
But in the third quarter, many cities and states started reopening their economies in phases — restaurants were allowing diners to sit outside and businesses brought limited numbers of workers back to the offices, among other actions. Many economic indicators have markedly improved since the pandemic shutdowns of April and May. For instance, unemployment, albeit still high, is down from historic records earlier in the year.
that Mailpac doesn’t align with our objective of investing in the manufacturing and distribution companies, we reduced or sold our position of Mailpac during the course of the year. Those proceeds went to purchasing some of the other stocks that we have in the index.”
This disposal didn’t materially affect the Class C share fund which realised a $239.9-million profit in the quarter,which was primarily due to the revaluation of the portfolio shares they hold. Due to the nature of Select Funds, there is no taxation due to the pass through like nature of the entity.
The Class B shares have almost purchased all the stocks in the JSE’S Financial Index with the exception of ISP Financial Services, which is one of the most tightly held stocks on the market.
Although Select Funds falls under the Bank of Jamaica’s one per cent exemption for dividends to be paid by certain financial companies, the company has given no indication of whether a dividend might be paid in November and whether or not to do a share buyback with the cash on the balance sheet.
“We have not contemplated, but something that we could actually look at in the future,” said Janene Shaw, who chaired the first AGM of Select Funds.
As to the fund’s future, Thompson spoke to the quality of companies that Sagicor Select Funds has invested in over the last year.
“We believe that we have invested in strong companies and these companies aren’t just strong in Jamaica, but they are Caribbean wide strong. When the pandemic subsides, we expect that these companies will emerge even stronger with growing profitability. We do believe that the stock prices will rebound eventually.”