Trading loss grew to $4.4B
NEW YORK — JPMorgan Chase, the largest bank in the United States, said today its loss from a highly publicized trading blunder had grown to $4.4 billion in the most recent quarter, more than double the bank’s original estimate of $2 billion.
The bank also said it was reducing its net income for the first quarter by $459 million because it had discovered information that “raises questions about the integrity” of values placed on certain trades.
“We don’t take it lightly,” CEO Jamie Dimon told Wall Street analysts on a conference call. He added: “We’re not making light of this error, but we do think it’s an isolated event.”
Dimon said the bank had closed the division of the bank responsible for the bad trade and moved the remainder of the trading position under its investment banking division.
Overall, JPMorgan said it earned $5 billion, or $1.21 per share, for the second quarter, which covers April through June and includes the bank’s disclosure of the trading loss May 10.
Analysts surveyed by FactSet, a provider of financial data, had expected JPMorgan to earn 76 cents per share. JPMorgan stock was down 49 cents, or 1.4 percent, at $33.55 in premarket trading.
Just three months ago, JPMorgan was viewed as the top American bank, guided by Dimon’s steady hand. However, since the disclosure of the trading loss that reputation has been eroded.
