More details full earnings release here:
- JPM Hammered By Massive $9.2 Billion In Legal Expenses, Posts First Loss Under Dimon; Takes $1.6 Billion Reserve Release (ZeroHedge, Oct 11, 2013):
So much for the JPM “fortress balance sheet.” Moments ago the bank which 18 months ago stunned the world with the biggest prop trading loss in history, just reported its first quarterly loss under Jamie Dimon, missing expected revenue of $24 billion with a print of $23.88 billion, but it was net income where the stunner was in the form of a $0.4 billion net income. The reason: the fact that from the government’s best friend, Jamie Dimon has become the punching bag du jour, and having to pay $9.15 billion in pretax legal expenses, the biggest in company history.
Quote Jamie Dimon:
While we had strong underlying performance across the businesses, unfortunately, the quarter was marred by large legal expense. 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. While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters.
Speaking of “strong underlying performance”, considering that the other key component of Q3 net income was a whopping $1.6 billion in loan loss reserve releases, one wonders just how truly strong Q3 earnings really were. But of course, this being Wall Street, all negative news is “one-time” and to be added back. Which is why JPM promptly took benefit for all charges, which means adding back the $7.2 billion legal expense and $992 MM reserve release after tax benefit. In short: of the firm’s $1.42 in pro forma EPS, a whopping $1.59 was purely from the addback of these two items.
- JP Morgan reports third-quarter loss after ‘painful’ $9.2bn legal costs (Guardian, Oct 11, 2013):
Embattled chief executive Jamie Dimon says otherwise strong performance has been ‘marred by a large legal expense’
Excluding the one-time costs, JP Morgan’s earnings were $5.8bn, or $1.42 a share.
America’s biggest bank, JP Morgan, has plunged to a loss in the third quarter of 2013 after being weighed down by legal expenses of $9.2bn (£5.8bn).
Jamie Dimon, the bank’s chairman and chief executive, called the loss “painful”. “We are just trying to improve and move on. Remember, these things are related to multiple year events. Remember, we didn’t lose any money during the crisis,” he told analysts on a conference call.
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Tags: Banking, Economy, Global News, Jamie Dimon, JPMorgan