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| JPMorgan Chase raises its recent trading loss to $4.4bn | JPMorgan Chase raises its recent trading loss to $4.4bn |
| (about 3 hours later) | |
| JPMorgan Chase has more than doubled its estimate of recent losses from trading in complex financial derivatives to $4.4bn (£2.8bn). | |
| The US bank said the executives responsible had been dismissed without severance pay and the bank would be clawing back two years of their pay. | The US bank said the executives responsible had been dismissed without severance pay and the bank would be clawing back two years of their pay. |
| Despite the revelation, href="http://files.shareholder.com/downloads/ONE/1968863506x0x582938/17e65c91-5f4c-455b-aced-c2cf6446c173/2Q12_Earnings_Presentation_FINAL_V2.pdf" >JPMorgan also reported a surprisingly strong three-month net profit of $4.96bn. | |
| The bank's shares rose more than 5% on the news in New York morning trading. | |
| The profit figure for the three months to 30 June was down 8.7% from the same period last year, but was nonetheless much higher than analysts' expectations. | |
| Clawback | |
| When the Wall Street firm first announced the loss at its chief investment office in May, it said it amounted to at least $2bn. | |
| The bank also said it had found evidence that some traders may have been trying to hide their losses. | The bank also said it had found evidence that some traders may have been trying to hide their losses. |
| JPMorgan said it would restate its results from the previous three months because it had made $459m less than it thought. | |
| It blamed the restatement on the fact that "certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter". | It blamed the restatement on the fact that "certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter". |
| Chief executive Jamie Dimon said he had closed the division of the bank responsible for the losses and moved the remainder of the trading position to its investment banking division. | Chief executive Jamie Dimon said he had closed the division of the bank responsible for the losses and moved the remainder of the trading position to its investment banking division. |
| The executive in charge of the closed division, Ina Drew, left the bank in May, days after the losses were announced. | The executive in charge of the closed division, Ina Drew, left the bank in May, days after the losses were announced. |
| The bank said it would claw back as much remuneration as possible from the individuals deemed responsible for the losses, equivalent to about two years' worth of pay. | |
| Before Friday's gains, JPMorgan had lost about 15% of its market value since the losses were first announced. | Before Friday's gains, JPMorgan had lost about 15% of its market value since the losses were first announced. |
| It also said that it expected another $700m to $1.7bn of losses from the derivatives trading. | It also said that it expected another $700m to $1.7bn of losses from the derivatives trading. |
| Responding to questions from analysts following the release of results, Mr Dimon said: "I think it's silly for anyone in the business world to think you're not going to make mistakes." | Responding to questions from analysts following the release of results, Mr Dimon said: "I think it's silly for anyone in the business world to think you're not going to make mistakes." |
| "It is not possible in the real world. I just think the mistakes should be smaller, fewer and far between, this being an exception." | "It is not possible in the real world. I just think the mistakes should be smaller, fewer and far between, this being an exception." |
| Wells Fargo | Wells Fargo |
| Another bank with rising shares on Friday was Wells Fargo, which was also reporting results. | Another bank with rising shares on Friday was Wells Fargo, which was also reporting results. |
| It posted second-quarter net profits of $4.6bn, up 17% from the same period last year. | It posted second-quarter net profits of $4.6bn, up 17% from the same period last year. |
| Its profits from mortgages were up to $2.9bn from $1.6bn last year. | Its profits from mortgages were up to $2.9bn from $1.6bn last year. |
| Wells Fargo is the fourth-biggest US bank and the biggest mortgage lender. | Wells Fargo is the fourth-biggest US bank and the biggest mortgage lender. |
| The results came the day after it paid $175m to settle allegations from the Justice Department that during the housing boom, it had charged higher rates and fees to African-American and Hispanic customers. | The results came the day after it paid $175m to settle allegations from the Justice Department that during the housing boom, it had charged higher rates and fees to African-American and Hispanic customers. |
| Wells Fargo said it had settled to avoid a long legal battle. | Wells Fargo said it had settled to avoid a long legal battle. |