Dive Brief:

• JPMorgan Chase's net income fell 69% to $2.9 billion, compared to a year ago, as the nation’s largest bank prepares for anticipated loan losses as a result of the coronavirus pandemic, according to the bank's first quarter earnings release Tuesday. 

• The bank attributed the massive earnings drop to a $6.8 billion addition to its credit reserves, a move taken in response to a potential economic downturn.

• "The company entered this crisis in a position of strength, and we remain well capitalized and highly liquid," JPMorgan Chase CEO Jamie Dimon said in a statement. "In the first quarter, the underlying results of the company were extremely good. However, given the likelihood of a fairly severe recession, it was necessary to build credit reserves of $6.8B, resulting in total credit costs of $8.3B for the quarter."

Dive Insight:

Net revenue for the U.S.’s largest bank was $28.3 billion for the quarter, down 3% compared to a year ago. 

In his annual shareholder letter released this month, Dimon told shareholders to expect earnings will be "down meaningfully in 2020" as the bank prepares for what it expects will be a "bad recession."

"At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008," he said. "Our bank cannot be immune to the effects of this kind of stress."

Octavio Marenzi, CEO of capital markets consultancy Opimas, told CNBC it is difficult to forecast whether the bank's decision to boost provisions for credit losses, up from up from only $1.5 billion last year, is enough to cover "what is sure to be a wave of defaults in the second quarter."

JPMorgan’s trading unit, however, delivered positive results for the quarter, posting a 32% increase in revenue to a record $7.2 billion, per the earnings release.

During the bank's earnings call, JPMorgan Chief Financial Officer Jennifer Piepszak provided some data on its participation in the Small Business Administration’s $350 billion Paycheck Protection Program (PPP), reporting it has funded $9.3 billion to small businesses as of Tuesday morning.

The program, which is meant to help businesses with fewer than 500 employees cover payroll, business expenses and operations amid the economic disruption caused by the pandemic, is part of the federal government’s $2.2 trillion coronavirus relief package. 

Piepszak said 300,000 businesses are in some stage of the application process, representing $37 billion in loans.

"To help the most vulnerable and hardest hit communities, as an initial step, we've announced a $150 million loan program to get capital to underserved small businesses and nonprofits, as well as a $15 million philanthropic investment," she added.

Dimon said the bank opened 500,000 new credit card accounts in March. However, credit card spending was down 13% for the month, Piepszak said, adding that she expects that trend to continue in April.