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 included a $9.15 billion charge for legal expenses related to various regulatory issues.
Despite the high legal costs, JPMorgan's underlying business performed well, with earnings of $1.42 per share, which was 21 cents above expectations.
JPMorgan's CEO, Jamie Dimon, stated that the results showed strong underlying performance across the businesses, although they were negatively impacted by large legal expenses.
JPMorgan is continuously evaluating its legal reserves and has significantly strengthened them to address the unpredictable environment and escalating demands from government agencies.
According to CEO Jamie Dimon, JPMorgan's litigation costs should eventually abate and normalize, but they may remain 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. The company settled some civil charges related to this incident with a $920 million settlement.
The legal charge of $9.15 billion was a significant factor in JPMorgan's quarterly loss, impacting the overall revenue of $23.12 billion.
Everyday investors can learn that even large and successful companies like JPMorgan can face unexpected challenges, such as legal expenses, which can impact financial results. It's important to consider both the underlying business performance and external factors when evaluating investments.
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