Russia-Ukraine war deals JP Morgan £402m blow

The US’s largest bank, JP Morgan, has been dealt a $524m (£402m) blow from losses linked to assets it owns in Russia, it announced today.

The firm headed by Jamie Dimon said losses had been driven by “markdowns of derivatives” tied to Russian counterparties.

The Wall Street investment bank has been part of a western effort to ostracise Moscow from the global business community in response to its brutal invasion of Ukraine.

Profits at the investment banking giant dipped around 20 per cent in the first three months of the year to $8.3bn (£6.4bn), driven by the release of a stream of funds set aside to cope with an expected wave of defaults triggered by the pandemic drying up.

Investment banking revenue dropped 28 per cent driven by the war hitting deal making appetite.

A bounceback in the American economy from the Covid-19 crisis has stimulated borrowing demand, boosting JP Morgan’s financials.

The US jobs market has roared back to strength, limiting the volume of defaults among households.

“Lending strength continued with average firmwide loans up 5 per cent while credit losses are still at historically low levels,” Dimon, chief executive and chairman of JP Morgan, said.

However, he warned the spillover negative economic effects from Russia’s war in Ukraine could hit the lender’s future bottom line.

Dimon said he sees “significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine”.

Fresh figures released yesterday revealed stateside inflation is running at its highest rate since December 1991, climbing to 8.5 per cent.