JPMorgan Is Back To Profits As Trading Slump Abates But the bank is still paying an extra $1 billion for legal expenses. JPMorgan Chase Chairman and Chief Executive Jamie Dimon. Joshua Roberts / Reuters JPMorgan Chase, the countrys biggest bank by assets, suffered its first loss under the reign of its chief executive and chairman Jamie Dimon in the third quarter of last year thanks to $9.15 billion in charges to help pay for its massive litigation bill. In the third quarter of this year, however, the bank swung back to a profit, with a net income of $5.6 billion, compared to a $400 million loss last year. The banks earnings of $1.36 a share were just short of analysts expectations of $1.38. The banks total revenue was, as always massive, with $25.2 billion in revenue, up from from $23.9 billion in the third quarter of last year and beating expectations of $24 billion. In more normal times, the banks $1 billion in additional legal expense would be seen as large, but when it and its competitors can pay around $20 billion in a single year to regulators, the charge is almost expected. Some of the results were made public on a third party website before the scheduled 7 a.m. ET release thanks to an operational error, a JPMorgan spokesperson told the Wall Street Journal. The banks fixed income trading revenue was $3.5 billion in the quarter, up 2% from a year ago, possibly signalling that the trading slump Wall Street has suffered for the last year has abated, if not exactly reversed. The bank has been hit hard by the year-long trading slowdown, with quarter-over-quarter declines in trading in fixed income trading in three of the previous four quarters, including dipping some 15% over the year in the second quarter. In Markets, we saw increased activity and better performance overall, particularly in currencies and emerging markets, Dimon said in a statement. Revenue from trading equities, however, was down 1.4% to $1.23 billion, which the bank blamed on lower revenues from derivatives based on stocks but said that services to stock-trading hedge funds helped offset that decline. JPMorgans chief financial officer Marianne Lake hinted that better results were coming in a conference last month, when she said that, at least through early September, trading activity was still down, but as much as it was earlier. Volatility, which often drives trading among large institutions like asset managers and hedge funds, ticked up later in the month. Despite challenges, we have continued to deliver strong underlying performance, maintain our fortress balance sheet and liquidity, simplify the business and adapt to regulatory changes, Dimon said. The earnings report comes at a time of slight stress for the bank. Dimon disclosed in July that he had been diagnosed with throat cancer. He has only spoken to reporters or the public twice since then, once three months ago to discuss earnings and last week when he sat on a panel at a finance conference with several other megabank CEOs. While Dimon has been working throughout his treatment and recovery, he has curtailed his travel which has lead, Lake said in September, to him being shockingly present in the banks New York headquarters. The company was the victim of an attack by hackers that lasted from mid-June to mid-August that exposed the personal information of 76 million households and 7 million small businesses. This information included names, addresses, emails addresses, phone numbers, and what kind of business relationship the individuals or businesses had with the bank. The bank said that there is no evidence that account information like passwords, social security numbers, or account numbers had been exposed to hackers and that there was no unusual amounts of fraud reported since the hack. We remain very focused on executing the control agenda and investing to protect our customers and the company for the future, Dimon said, alluding to the banks massive efforts to comply with new regulations and its increased spending on cybersecurity. The banks expenses outside of interest it pays were $6.3 billion, down 8% from a year ago. JPMorgan did say, however, that expenses related to the Home Deport credit breach meant that overall expenses did not fall as much as they would have otherwise. The bank is planning on spending some $250 million on cybersecurity this year, Dimon said last week that the number will likely double next year. View Entire List › ift.tt/1tZM2Kk October 14, 2014 at 08:23PM
Posted on: Tue, 14 Oct 2014 12:10:53 +0000
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