This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/business-18829551#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
The article has changed 9 times. There is an RSS feed of changes available.
Version 5 | Version 6 |
---|---|
JPMorgan Chase raises its recent trading loss to $5.8bn | |
(about 3 hours later) | |
JPMorgan Chase has tripled its estimate of recent losses from trading in complex financial derivatives to $5.8bn (£3.7bn). | |
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, JPMorgan also reported a surprisingly strong three-month net profit of $4.96bn. | Despite the revelation, 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 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. | 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 | 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. | When the Wall Street firm first announced the loss at its chief investment office in May, it said it amounted to at least $2bn. |
However, in its latest financial results, the bank said that it had recorded a $4.4bn loss in the second quarter of the year due to the trading position, on top of a $1.4bn loss in the first three months of the year. | |
That $1.4bn figure was $459m bigger than the bank had initially calculated, forcing JPMorgan to restate its first quarter results. | |
It also said that it expected another $700m to $1.7bn of losses from the derivatives trading, bring losses to a potential total of $7.5bn. | |
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. |
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. | 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. |
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. |