After varying financial results in the first quarter, major institutions issue a warning about an uncertain year ahead

Large banks issued a warning about a “uncertain” year due to the first quarter’s uneven financial performance, persistently rising inflation, and geopolitical conflicts in the Middle East, Europe, and other regions.

While Wells Fargo and Citigroup announced lower profits on Friday, both companies exceeded Wall Street estimates, JPMorgan recorded a slight 6% increase in earnings.

Numerous economic indicators are still positive. JPMorgan CEO Jamie Dimon said, “But looking ahead, we remain alert to a number of significant uncertain forces,” noting the conflicts in Gaza and Ukraine in addition to other geopolitical challenges, high levels of global government expenditure, and “persistent inflationary pressures.”

Similar to what he said to investors in his annual shareholder letter earlier this week, Dimon used similar wording on Friday. In that letter, Dimon issued a warning that political divisiveness in the United States and other geopolitical developments, such as the Israel-Hamas conflict and the conflict in Ukraine, might be fostering conditions that “may very well be creating risks that could eclipse anything since World War II.”

Two days later, the United States released hotter-than-expected inflation data for March, which put uncomfortably high consumer prices back at the top of policymakers’ agendas—especially President Joe Biden, who is running for a second term in office—making Dimon’s shareholder letter from Monday seem prophetic.

Executives from Citigroup repeated Dimon’s remarks on a press conference call. Chief financial officer of Citi, Mark Mason, said that while the firm continues to believe in an economic soft landing, in which inflation declines but economic growth continues, there are several threats to the economy.

Mason said, “The global economy seems to be resilient,” but the bank is still worried about inflation and what would happen if interest rates are kept high for an extended length of time.

The biggest bank in the country, JPMorgan, made $13.42 billion in profit, or $4.44 per share, as opposed to $12.62 billion, or $4.10 per share, at the same time last year. A $725 million one-time fee for an evaluation by the Federal Deposit Insurance Corporation hurt JPMorgan’s earnings.

The bank’s cautious full-year net interest income predictions were revealed on Friday, and even though they exceeded analyst expectations, JPMorgan’s shares dropped more than 5%. The bank’s prediction that the Federal Reserve would lower interest rates later this year is mainly reflected in that projection.

For the quarter, JPMorgan’s business indicators were mostly strong. The bank saw a rise in activity even though investment banking revenues were almost unchanged. Profits at the consumer bank increased by 6%, and less money was placed aside to cover possibly problematic loans.

Following many scandals, the Biden administration loosened several of the bank’s regulations, and Wells Fargo released its first earnings report following those changes.

Wells exceeded analyst forecasts of $1.06 per share by earning $4.6 billion, or $1.20 per share, in the first quarter. But the profit was not as much as Wells made last year during the same time, which came to $5 billion, or $1.23 per share.

The San Francisco bank said that while average loans decreased from the first quarter of the previous year, this decline was anticipated given the high interest rates.

One of the authorities over large national banks, including Wells Fargo, the Office of the Comptroller of the Currency, ended a consent order in February that had been in effect since September 2016. The order required the bank to restructure how it sold financial products to customers and provide additional consumer protections, as well as employee protections for whistleblowers. The order was the result of investigations into allegations that Wells’ employees had opened millions of accounts illegally in order to meet inflated sales targets.

Profits at Citigroup fell 27% from the previous year as the firm continues to reorganize itself after the pandemic and the sale of several of its overseas franchises.

In contrast to a year earlier profit of $4.6 billion, or $2.19 per share, Citi made $3.37 billion, or $1.58 per share.

On Friday, Wells’ stock saw a little increase, while Citigroup’s had a more than 2% decline.