It’s been said about a dozen times on the IndsideCounsel site alone, but it bears saying again: 2013 has been a rough year for mega-bank J.P. Morgan Chase.
As of Oct. 11, the bank has announced a third-quarter net loss of $380 million, owing most of that loss to its embroilment in a number of ongoing probes and regulation infringements. Despite the losses, the bank still had a net income of $5.8 billion dollars, on revenue of $23.9 billion. The losses translate to a dip of approximately 17 cents a share.
The bank has posted legal expenses of around $9.2 billion dollars thus far this year and is currently in talks with the Department of Jusice to settle a series of mortgage probes for an estimated $11 billion. This figure has been in constant flux, however, and no official has been prepared to confirm it as of yet.
In a statement, Jamie Dimon, J.P. Morgan’s chairman and CEO, commented on the state of affairs at the company: “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.”
In September the bank paid a billion dollars in fines relating to credit card marketing violations and to settle investigations into the so-called “London Whale” derivatives trading scandal.
J.P. Morgan is not the only bank that is currently feeling the heat from federal investigation. In what appears to be increasing pressure from government regulatory bodies, Wells Fargo and Bank of America have also recently been the focus of probes, and investigation over mortgage securities they sold on the run up to the financial implosion of 2007.