|JPMorgan books 3Q loss on litigation charge||| Print ||
|Written by STEVE ROTHWELL, AP Markets Writer|
|Friday, 11 October 2013 09:08|
NEW YORK (AP) — JPMorgan Chase, the biggest U.S. bank by assets, reported a third-quarter loss after setting up a big reserve for legal expenses.
The bank absorbed a reserve for litigation expenses of $9.2 billion in the July-to-September period, pushing the lender to a loss of $380 million compared with a then-record profit of $5.7 billion a year earlier.
Excluding charges, however, its adjusted earnings beat Wall Street expectations. Its shares edged up in premarket trading Friday.
Last month, JPMorgan agreed to pay $920 million and admitted that it failed to oversee trading that led to a $6 billion loss last year. The lender is also said to be discussing an $11 billion national settlement with the Department of Justice following an investigation into the company's handling of mortgage-backed securities in the run-up to the recession. The securities lost value after a bubble in the housing market burst and helped spur the financial crisis.
"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," said JPMorgan CEO Jamie Dimon in a press release accompanying the earnings. "While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters."
The bank posted a loss of 17 cents per share in the latest quarter, compared with net income of $1.40 per share a year earlier.
Excluding the litigation expense, it earned $5.8 billion, or $1.42 a share, in the quarter. That beat analysts' forecasts for earnings of the $1.19 a share, according to FactSet.
Revenue fell 8 percent, to $23.9 billion, missing analysts' estimate of $24.1 billion.
The company's stock rose 60 cents to $53.12 in premarket trading about 45 minutes ahead of the market opening.
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