For Wall Street, the fees the bank earned providing investment banking services, like advising companies on mergers and underwriting initial public offerings, fell sharply. They were 54 per cent lower than they were a year earlier, contributing to a 26 per cent drop in profit for its Wall Street business overall. But the quick and substantial swings in the prices of stocks, bonds and other financial products caused the bank’s revenue to rise 15 per cent from last year in its trading businesses, which thrive during times of volatility.

JPMorgan also announced that it was suspending buybacks of its stock — a way of distributing extra cash to shareholders — to build reserves of capital more quickly to meet reconfigured requirements set by regulators. Dimon told reporters that without the new regulatory requirements, the bank would “probably” still be buying back stock.

Profit at Morgan Stanley also missed analyst expectations. The investment bank and investment firm’s earnings fell nearly 30% in the second quarter from a year earlier, to US$2.4 billion. The recent market turmoil halted deals and caused fees from stock and bond offerings to plunge.

Nonetheless, the bank, unlike JPMorgan, announced a new stock buyback, saying it planned to repurchase as much as US$20 billion of the company’s shares, although the bank didn’t give a time frame for the purchases. Past buybacks have raised issues with regulators, who worry in times of turmoil that using cash to buy shares depletes the capital that banks have to cover loan losses.

On a conference call with analysts, James Gorman, Morgan Stanley’s CEO, got pushback from some analysts on the buyback plan. Mike Mayo, who covers banks for Wells Fargo, asked whether it was time for the bank to shift to “Plan B,” given the worsening economic outlook.

“It’s a challenging market, but I think it is important to say that it’s not 2008 complicated,” Gorman said.

He suggested that the bank would be more conservative in its plans for expansion. “We are in a bit of an uncertain world,” he said. “I don’t think this is the time to be overly aggressive.”

This article originally appeared in The New York Times.

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