In his annual letter to shareholders on Monday, JPMorgan Chase & Co (NYSE:JPM) CEO Jamie Dimon stated that the ongoing Russia-Ukraine war will lead to a significant financial loss for the bank.
What Happened: In the letter, Dimon told shareholders, “We are not worried about our direct exposure to Russia, though we could still lose about $1 billion over time.”
He noted that JPMorgan is anticipating the economic impact of the conflict to be felt around the world. “The war in Ukraine and the sanctions on Russia, at a minimum, will slow the global economy — and it could easily get worse,” Dimon wrote. Although he acknowledged that “the effects of geopolitics on the economy are harder to predict.”
Dimon said JPMorgan continues to closely monitor the war and told shareholders that "while it is possible, and hopeful, that all of these events will have peaceful resolutions, we should prepare for the potential negative outcomes."
The JPMorgan chief also warned about the potential consequences of escalating sanctions against Russia. "Many more sanctions could be added — which could dramatically, and unpredictably, increase their effect." he stated. "Along with the unpredictability of war itself and the uncertainty surrounding global commodity supply chains, this makes for a potentially explosive situation."
Also Read: JPMorgan Stock Traded Flat In March: What's Next
Why It Matters: Dimon said the war in Ukraine has had a permanent impact on Western democracies. He wrote that once the conflict ends, the aftermath “likely will affect geopolitics for decades, potentially leading to both a realignment of alliances and a restructuring of global trade.”
Diamond also stressed the human cost of the war in Ukraine. “Our hearts go out to all of those affected by the war — JPMorgan Chase and its employees have already donated over $5 million to the Ukrainian humanitarian crisis, with more to come,” he wrote.
Photo: Courtesy of FORTUNE Global Forum on Flickr
