US banking crisis adds to 'storm cloud' risks: JPMorgan chief

By Ovunc Kutlu

ISTANBUL (AA) - JPMorgan Chase's chief executive said Friday the recent crisis in the US banking industry adds risks to "storm clouds" amid the outlook of the American economy.

"The U.S. economy continues to be on generally healthy footings —consumers are still spending and have strong balance sheets, and businesses are in good shape," Chairman and CEO Jamie Dimon said in a statement.

"However, the storm clouds that we have been monitoring for the past year remain on the horizon, and the banking industry turmoil adds to these risks," he added.

Dimon in June 2022 had urged investors to "brace" for a "hurricane" in the current financial environment, which is dominated by major hurdles such as the Federal Reserve monetary tightening, global supply chain disruptions and record inflation.

He later said in the second half of last year that record inflation may derail the American economy this year, adding that a recession in the global and US economy is likely by mid-2023.

Most recently, he said last week that the US banking crisis will "not necessarily force a recession" but "it is recessionary."

Dimon's comments come as JPMorgan Chase posted record revenue of $38.3 billion in the first quarter of this year, according to its financial result statement released Friday.

The figure is an increase of approximately 25% from $30.7 billion from the same period of last year.

The US-based multinational financial services company saw its net income rise 52% to $12.6 billion in the January-March period of this year, from $8.3 billion in the same period of last year.

Dimon noted that the current banking situation is distinct from the 2008 financial crisis, but said "financial conditions will likely tighten as lenders become more conservative, and we do not know if this will slow consumer spending."

"We also continue to monitor for potentially higher inflation for longer (and thus higher interest rates), the inflationary impact of continued fiscal stimulus, the unprecedented quantitative tightening, and geopolitical tensions including relations with China and the unpredictable war in Ukraine," he added.