JPMorgan chalks up big quarterly loss over $9b legal bill
The bank, the nation's largest by assets, reported a net loss of $US380 million ($403 million) on revenues of $US23.12 billion, caused in large part by a $US9.15 billion charge for legal expenses over a series of high-profile regulatory problems.
When the special items were stripped away, the bank earned $US1.42 a share, 21¢ above expectations.
JPMorgan chief executive Jamie Dimon said the results demonstrated "strong underlying performance across the businesses" but that results were "marred by large legal expenses".
"We continuously evaluate our legal reserves, but in this highly charged and unpredictable environment, with escalating demands and penalties from multiple government agencies, we thought it was prudent to significantly strengthen them," Mr Dimon said.
"Our litigation costs should abate and normalise over time but they may continue to be volatile over the next several quarters."
JPMorgan in September signed off on a $US920 million settlement to resolve some civil charges related to the "London whale" debacle, during which the company lost $US6.2 billion in errant and poorly managed trades.
Frequently Asked Questions about this Article…
JPMorgan Chase reported a rare quarterly loss primarily due to high legal costs, which amounted to $9.15 billion. These expenses were related to a series of high-profile regulatory problems.
Despite the quarterly loss, JPMorgan's underlying business performed well, with earnings of $1.42 per share, which was 21 cents above expectations. This indicates strong performance across its business sectors.
JPMorgan's CEO, Jamie Dimon, mentioned that the results were marred by large legal expenses. He emphasized the need to strengthen legal reserves due to the unpredictable environment and escalating demands from government agencies.
According to CEO Jamie Dimon, while litigation costs should eventually abate and normalize, they may continue to be volatile over the next several quarters.
The 'London whale' debacle refers to a situation where JPMorgan lost $6.2 billion due to errant and poorly managed trades. This incident led to a $920 million settlement to resolve some civil charges.
The legal charge was highly significant, amounting to $9.15 billion, which was a major factor in the bank's reported net loss of $380 million for the quarter.
JPMorgan is continuously evaluating its legal reserves and has decided to significantly strengthen them to manage the unpredictable legal environment and escalating penalties from multiple government agencies.
For everyday investors, JPMorgan's quarterly performance highlights the importance of considering both underlying business strength and potential legal risks when evaluating investment opportunities in financial institutions.
Call 1300 880 160
Start a chat
Schedule a call
