JPMorgan posts first loss since 2004, a blow to Dimon
By David Henry
(Reuters) - Jamie Dimon, JPMorgan Chase & Co Inc's hard-charging chief executive, looked a bit more vulnerable on Friday after the bank took a $7.2 billion hit from litigation expenses and posted its first quarterly loss since 2004.
The loss is a blow to Dimon, who has long used the bank's steady profit as a shield to ward off critics of its mounting regulatory and legal issues. The bank for the first time said it has stockpiled reserves of $23 billion for expected settlements and other legal expenses.
In unusually humble language for a CEO once lionized on Wall Street and in Washington, Dimon said that the first loss under his leadership was "very painful for me personally."
JPMorgan reported a loss of $380 million, or 17 cents per share, for the third quarter. A year earlier it posted a profit of $5.71 billion, or $1.40 a share.
Dimon earned widespread praise as a risk manager for avoiding most of the mortgage-related losses that hobbled rivals during the financial crisis. But he was less adept at anticipating legal expenses.
"His halo is a little off-kilter at this point," said Jordan Posner, a senior portfolio manager at Matrix Asset Advisors of New York, which owns over 600,000 JPMorgan shares.
The third-quarter legal hit includes money set aside for future settlements. Dimon cautioned that these expenses will likely be elevated for the next year or two.
"I wish we could reduce the uncertainty for investors, but we can't," he told reporters in a conference call. Continued...