JPMorgan hit by legal costs, Dimon says banks 'under assault'

Wed Jan 14, 2015 1:34pm EST
 
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By Tanya Agrawal and David Henry

(Reuters) - JPMorgan Chase & Co, the biggest U.S. bank by assets, reported a 6.6 percent drop in quarterly profit as legal costs exceeded $1 billion in the wake of government probes, leading Chief Executive Jamie Dimon to claim banks were "under assault."

JPMorgan agreed in November to pay $1 billion in penalties over its conduct in foreign exchange markets. Investigations into that and other areas of the bank's business, including alleged manipulation of Libor interest rates, are continuing.

"Banks are under assault," Dimon said on a call with reporters, responding to a question about legal costs.

"We have five or six regulators coming at us on every issue," he said, taking a less conciliatory tone after admitting last year that he had a "tin ear" when dealing with officialdom.

However, while legal expenses rose to $1.1 billion in the fourth quarter, from $847 million a year earlier, total legal costs of $2.9 billion for the year were far less than the $11.1 billion recorded in 2013.

Apart from legal costs, JPMorgan's earnings were hit by a 14 percent fall in revenue from fixed-income trading, after adjusting for the sale of the bank's physical commodities business and accounting changes.

JPMorgan's shares were down 5.5 percent at $55.60 in afternoon trading on Wednesday, on track for their biggest one-day fall in just over two years.

The results from JPMorgan are a pointer to the performance of its competitors, which are also struggling to adjust to stricter trading rules in the aftermath of the financial crisis.   Continued...

 
A customer exits the lobby of JPMorgan Chase & Co. headquarters in New York May 14, 2012.  REUTERS/Eduardo Munoz