The biggest US bank by assets, JPMorgan reported US$8.3 billion in first-quarter profits, down 42% from the year-ago period.

Revenues dipped 5% to US$30.7 billion.

The results contrasted sharply with those from a year ago, when JPMorgan’s surging profits including US$5.2 billion in funds that it had initially set aside early in the pandemic for potential defaults, but didn’t need because of the surprisingly solid condition of clients.

The bank’s charge offs for the quarter came in at a relatively modest US$582 in the first quarter, but JPMorgan chief executive Jamie Dimon warned of factors that could lead that figure to rise.

“We remain optimistic on the economy, at least for the short term – consumer and business balance sheets as well as consumer spending remain at healthy levels – but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine,” Dimon said.

In terms of customer trends, Dimon cited an uptick in credit card spending on dining and travel, but said higher mortgage rates had dented home lending originations, while limited vehicle availability crimped car loan originations.

JPMorgan scored higher net interest income, reflecting a boost to lending fees because of higher interest rates.

Profits fell in investment banking on lower equity and debt underwriting fees.

Shares fell 1.2% to US$129.97 in pre-market trading.