Dimon Warns of ‘Most Dangerous Time’ as Banks Report Big Profits

JPMorgan Chase’s chief executive, Jamie Dimon, is as close as Wall Street has to a statesman, and on Friday he sounded a major alarm about the global effects of the conflict in Israel and Gaza.

“This may be the most dangerous time the world has seen in decades,” he said in a statement accompanying the bank’s quarterly earnings. He warned of “far-reaching impacts on energy and food markets, global trade and geopolitical relationships.”

For Mr. Dimon, weighing in on geopolitics isn’t new: He consistently warns of dangers from the war in Ukraine and elsewhere. On Friday, he said he was preparing the nation’s largest bank for a range of scary outcomes, with other risks including high inflation and rising interest rates. But on a call with reporters, he described the conflict in Israel and Gaza as “the highest and most important thing for the Western world.”

Otherwise, JPMorgan and other big banks appear to be operating smoothly. JPMorgan’s profit rose to $13.2 billion in the third quarter, a 35 percent rise from the same period last year. Executives at the bank said the tumult of the regional banking crisis of the spring, which resulted in JPMorgan taking over First Republic, was steadily fading.

“U.S. consumers and businesses generally remain healthy,” Mr. Dimon said, “although, consumers are spending down their excess cash buffers.”

Wells Fargo, too, reported earnings that beat analysts’ expectations: Third-quarter profit was $5.8 billion, up 61 percent from last year. But the bank’s chief executive, Charles W. Scharf, warned that he was seeing some signs of stress among customers.

Mr. Scharf cited the impact of the slowing economy, and said borrowers were reducing their loan balances — perhaps good for consumers, but a difficult spot for banks, which make money off lending. Losses on bad debts rose “modestly,” he said.

Citigroup’s profit rose to $3.5 billion in the third quarter, a 2 percent gain that was slightly higher than expected. “We truly are a bank for all seasons,” the bank’s chief executive, Jane Fraser, said in a statement, adding that each of the bank’s five core business lines recorded revenue growth compared with a year earlier.

“The consumer remains quite resilient,” said Mark Mason, Citi’s chief financial officer. Payment rates were edging lower and spending was slowing, but only slightly, he said. Customers were still spending and paying down their card balances more steadily than they had in 2019 before the pandemic.

“The U.S. keeps surprising us with its resilience,” he said. A so-called soft landing for the economy was increasingly likely, he added.

The share prices of the three banks rose about 3 percent on Friday, outpacing the overall market. All of the banks, said Mr. Dimon, are in regular contact with one another about the potential effects of international conflicts. “We are all climbing the wall of worry a bit,” he said.