^

Business

JPMorgan posts first loss since 2004

The Philippine Star

MANILA, Philippines - Jamie Dimon, JPMorgan Chase & Co Inc’s hard-charging chief executive, looked a bit more vulnerable on Friday after the bank took a $7.2 billion hit from litigation expenses and posted its first quarterly loss since 2004.

The loss is a blow to Dimon, who has long used the bank’s steady profit as a shield to ward off critics of its mounting regulatory and legal issues. The bank for the first time said it has stockpiled reserves of $23 billion for expected settlements and other legal expenses.

In unusually humble language for a CEO once lionized on Wall St. and in Washington, Dimon said that the first loss under his leadership was “very painful for me personally.”

JPMorgan reported a loss of $380 million, or 17 cents per share, for the third quarter. A year earlier it posted a profit of $5.71 billion, or $1.40 a share.

Dimon earned widespread praise as a risk manager for avoiding most of the mortgage-related losses that hobbled rivals during the financial crisis. But he was less adept at anticipating legal expenses.

“His halo is a little off-kilter at this point,” said Jordan Posner, a senior portfolio manager at Matrix Asset Advisors of New York, which owns over 600,000 JPMorgan shares.

The third-quarter legal hit includes money set aside for future settlements. Dimon cautioned that these expenses will likely be elevated for the next year or two.

“I wish we could reduce the uncertainty for investors, but we can’t,” he told reporters in a conference call.

Later, in a conference call with investors, he said it is “very hard to fight with your regulators and the federal government.”

Even putting litigation aside, revenue fell and other results were lukewarm. Weak fixed-income markets squeezed revenue at JPMorgan’s investment bank, off 2 percent from a year ago and down 17 percent from the second quarter, reflecting the tough environment for bond-trading at all Wall St banks.

Equity markets revenue gained 20 percent. Rivals such as Goldman Sachs Group Inc and Morgan Stanley, both due to report earnings next week, tend to be more heavily weighted in fixed income.

JPMorgan executives have long been quick to point out the bank’s profitability when investors bring up its troubles. The bank posted record profits last year, even as bad derivatives bets known as the “London whale” trades resulted in $6 billion of losses.

BANK

CO INC

DIMON

GOLDMAN SACHS GROUP INC AND MORGAN STANLEY

JAMIE DIMON

JORDAN POSNER

JPMORGAN

MATRIX ASSET ADVISORS OF NEW YORK

WALL ST

WALL ST.

  • Latest
  • Trending
Latest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with
no session for state
no session for code
no session for id_token
no session for user