JP Morgan boss Jamie Dimon has warned that the bank is facing a US$1bn hit from the Russian invasion of Ukraine.
The war will have a big and lasting impact on the global economy, he added.
In his annual letter to shareholders, the US bank's chairman and chief executive said that the world was entering unprecedented territory with potentially much higher risks for investors.
"We are facing challenges at every turn: a pandemic, unprecedented government actions, a strong recovery after a sharp and deep global recession, a highly polarized U.S. election, mounting inflation, a war in Ukraine and dramatic economic sanctions against Russia," he wrote.
“They present completely different circumstances than what we’ve experienced in the past – and their confluence may dramatically increase the risks ahead
This might mean rate rises being a lot higher than economists are currently forecasting, he said.
He also said the bank was worried about the secondary impact of Russia’s actions, adding that the geopolitical effects might last for decades.
“America must be ready for the possibility of an extended war in Ukraine with unpredictable outcomes. We should prepare for the worst and hope for the best"
On a micro level, Dimon added that the bank could withstand losses of up to US$10bn or more given the strength of its balance sheet.
The bank has spent nearly US$5bn on acquisitions over the past 18 months something that has been questioned by some shareholders, which might have been taken on board by the bank.
Dimon said incremental expenses would rise by USA$700mln this year, though share buybacks would be reigned in next year to bolster its regulatory capital.