The health crisis slammed quarterly earnings at two of the U.S.' largest banks. JPMorgan Chase's profit plunged 68%. The pandemic forced the U.S.' biggest bank to set aside massive reserves to cover loans that may go bust.
The outbreak has shut down businesses and put 16 million people out of work in the U.S. JPMorgan CEO Jamie Dimon said in a statement, "Given the likelihood of a fairly severe recession, it was necessary to build credit reserves of $6.8 billion." Those reserves include $4.5 billion against potential defaults on consumer loans.
The bank said its corporate customers have drawn down tens of billions of dollars on their credit lines. It also said it has been flooded with 300,000 loan applications for the government's small business bailout fund. It says it has funded more than $9 billion of those loans.
Profit also plunged at its peer Wells Fargo which set aside billions of dollars to cover potential loan losses. Look for Bank of America, Citigroup and Goldman Sachs to report results Wednesday, followed by Morgan Stanley on Thursday.