JPMorgan Chase & Co (NYSE:JPM) slashed its guidance for the year and cancelled its share buybacks as it now forecasts a "mild" US recession in the second half of the year.
Shares fell almost 3% in pre-market trading to US$108.82.
Chief executive Jamie Dimon said the bank "performed well" in the second quarter, but global investment banking fees were down 54% compared to a record last year, in what he said was "a challenging macro environment".
He said the global economy is "dealing with two conflicting factors, operating on different timetables", with the US economy continuing to grow and the job market and consumer spending remaining healthy.
But at the same time he said there was very likely to be "negative consequences on the global economy sometime down the road" stemming from "geopolitical tension, high inflation, waning consumer confidence, the uncertainty about how high rates have to go and the never-before-seen quantitative tightening and their effects on global liquidity, combined with the war in Ukraine and its harmful effect on global energy and food prices".
Profits fell less than expected in the three months ended June 30, with net income fell 28% to US$8.6bn, or US$2.76 a share, on revenue that edged up slightly year-on-year to US$30.7bn.
Analysts estimates had pointed to EPS of US$2.89 on revenue of US$31.8bn, according to FactSet.
JPMorgan made a US$1.1bn provision for credit losses, including US$657mln of net 'charge-offs' and a net reserve build of US$428mln, primarily reflecting loan growth as well as a modest deterioration in the economic outlook