Data released by the Federal Reserve last week revealed that, under a severely adverse economic scenario, JPMorgan Chase would be able to maintain Tier 1 capital ratios above the required minimum five percent.
JPMorgan CEO Jamie Dimon announced last year that the bank planned to increase its dividends and buy back $15 billion worth of shares, but the Federal Reserve suspended the share repurchase program after the lender’s $6.2 billion loss at its London-based investment office, The Motley Fool reports.
While JPMorgan went into this year’s stress testing with a Tier 1 capital ratio of 10.4 percent, about 50 basis points higher than the previous year, the level still fell to 6.3 percent, the same level as under last year’s test. The bank also posted its own projections, saying that its capital ratio would fall to 7.6 percent, according to The Economic Times.
The Fed’s Pre-Provision Net Revenue, which is essentially a measurement of operating profit, compared to 2011, fell from $59.3 billion to $45 billion, and its loss provisions increased from $48.9 billion to $51.3 billion. While JPMorgan is a global financial institution, about 65 percent of its loan losses would be tied to consumer products, The Motley Fool reports.