American banking giant JPMorgan Chase has reported that its second quarter profit slumped by 28% $8.6bn, primarily driven by a net credit reserve build of $428m.

 The New York-headquartered bank, which posted a profit of $11.9bn in the year-ago period, has also decided to “temporarily” suspend share buybacks.  

The bank has also decided to set aside more money to cover potential loan losses.

The group’s net revenue increased 1% to $31.6bn in the three months to June. Net interest income (NII) increased 19% to $15.2bn.

Noninterest revenue fell by 12% to $16.4bn in the quarter, driven mainly by lower fees in Investment Banking and lower card income in Consumer and Community Banking (CCB). This was partially offset by higher markets revenue in the corporate and investment banking (CIB) unit.

Revenue at JPMorgan’s investment banking unit plummeted 61% to $1.4bn amid lower fees from deals and debt and equity issuances.

The asset and wealth management unit also recorded a 13% slide in net income while its net revenue increased 5% to $4.3bn in the quarter.

The unit’s assets under management (AuM) were down by 8% at $2.7 trillion, driven by lower market levels.

JPMorgan chairman and CEO Jamie Dimon said: “JPMorgan Chase performed well in the second quarter as we earned $8.6bn in net income on revenue of $30.7bn and an ROTCE of 17%, with growth across the lines of business, while maintaining credit discipline and a fortress balance sheet.”

Dimon further said: “As a result of the recent stress tests and the already scheduled GSIB increase, we will build capital and continue to effectively and actively manage our RWA.

“In order to quickly meet the higher requirements, we have temporarily suspended share buybacks which will allow us maximum flexibility to best serve our customers, clients and community through a broad range of economic environments.”