JPMorgan Chase & Co. added US$902 million to its reserves for bad debt, saying the odds of a recession were slightly higher because of rising inflation and the war in Ukraine. 

The increase, the bank’s first since the depths of the pandemic in 2020, included about US$300 million linked to Russia, Chief Financial Officer Jeremy Barnum said Wednesday on a conference call with analysts. The rest reflects recession concerns.

The possibility of an economic downturn sparked by Federal Reserve interest-rate hikes moved from “low” to “slightly less low,” Barnum said.

Chief Executive Officer Jamie Dimon said that, while U.S. consumers and businesses are in good shape right now, inflation, higher interest rates and the war are “storm clouds on the horizon” that need to be taken into account.

“I hope those things all disappear and go away, we have a soft landing, and the war is resolved,” Dimon said on the call. “I just wouldn’t bet on all that.”

Dimon blamed much of the US$902 million reserve increase on an accounting requirement known as CECL, which forces banks to make frequent adjustments to their reserves based on hypothetical economic scenarios. “This number can swing around a lot,” and has little to do with the bank’s actual results, he said.