(Reuters) - The chief financial officer of JPMorgan Chase & Co (JPM.N) said on Monday that the company will build its litigation reserves in the third quarter at a cost that will “more than offset” the benefit of a simultaneous release of extra reserves it had taken for mortgage losses.
Speaking at an investor conference, CFO Marianne Lake declined to say by how much the company will increase the legal reserves. She said the expense would be greater than the $1.25 billion of mortgage reserve releases she expects in the third quarter.
JPMorgan faces a raft of government investigations and private lawsuits, including actions over its marketing of mortgage bonds before the financial crisis and its “London Whale” derivatives debacle last year that cost the company $6.25 billion.
Lake also said the company will lose money on its mortgage production business in the third and fourth quarter of this year because its refinancing loan volumes have fallen faster than it has reduced its costs.
Reporting by David Henry in New York; Editing by James Dalgleish