Investors looking for a quick return to high profit margins at big banks could be in for a big disappointment.

JPMorgan Chase (NYSE:JPM), for one, will see a relatively weak bottom line in the company's current Q2 of fiscal 2020. In an industry conference on Tuesday in New York, in answer to an analyst's question on credit-loss provisioning, the bank's CEO Jamie Dimon said this could easily be "roughly equivalent" to the steeply increased level of Q1.

Stacks of $100 bills.

Image source: Getty Images.

For banks, that quarter was marked by heavier provisioning nearly across the board. This is because defaults are expected to rise sharply because of the economic damage wreaked by the SARS-CoV-2 coronavirus outbreak. In Q1, JPMorgan Chase increased its credit-loss provisioning by nearly sixfold to nearly $8.3 billion. While the company was still profitable on the bottom line, said profit was down sharply; it fell 69% year over year to $2.87 billion.

Dimon speculated that the picture will become clearer soon after that for banks such as his.

"You're going to know a lot more by the end of the third quarter because you're going to see what actually happened to delinquencies and roll rates for credit card[s]," he said. "You're going to see the first round of forbearances and mortgages come due, how many people can actually start paying new mortgage[s] again. So you're going to see like how much stress and strain it was."

JPMorgan Chase investors don't seem fazed by the prospect of continued heavier provisioning. They bid the company's stock up by 7.1% on Tuesday.

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