RegionsNorth AmericaJP Morgan Profits Fall After ‘London Whale’ Sinks Results

JP Morgan Profits Fall After ‘London Whale’ Sinks Results

JP Morgan Chase announced a Q212 profit of US$5bn on revenue of US$22.9bn. The results were marred by credit trading losses of US$4.4bn in its London offices resulting from bad derivatives trades in its chief investment office (CIO). These resulted from the nefarious activities of the so-called ‘London Whale’, trader Bruno Iksil, who has since left the bank.

The US$4.4bn loss resulting from Iksil’s activities was more than double the initial estimate made by the bank’s chief executive officer (CEO) Jamie Dimon, when he first announced the loss on 10 May. However, recent reports had suggested an even higher upward revision to as much as US$9bn might be the real impact of Iksil’s profit-seeking ‘hedges’.

JP Morgan also revised its Q112 income downwards by US$459m and said that some of its traders “may have been seeking to avoid showing” the full extent of their losses, which had resulted from “a material weakness” in internal controls. The high profits announced today would have been significantly higher but for the London office.

Dimon explained that the bank had reviewed its CIO losses and believed that the bad trades were restricted to the unit. It was reported earlier this week that it will seek to reclaim millions of dollars from individuals responsible for the trading losses, beginning with its former CIO head Ina Drew who has also left the bank.

Related Articles

India-US trade corridor: Accelerating growth with reverse factoring

Deals & Markets India-US trade corridor: Accelerating growth with reverse factoring

2m Vinod Parmar
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

3m Victoria Beckett
Money market reforms: Navigating LVNAV, CNAV and VNAV

EEA Money market reforms: Navigating LVNAV, CNAV and VNAV

4m Victoria Beckett
Cash repatriation: The bar is now set

Cash Management Cash repatriation: The bar is now set

4m Bob Stark
New accounting standards may bring treasury losses: S&P interview

Accounting New accounting standards may bring treasury losses: S&P interview

6m Victoria Beckett
AFP interview: Treasurers prepare for US interest rate hike with synthetic euro debt

Economy AFP interview: Treasurers prepare for US interest rate hike with synthetic euro debt

7m Victoria Beckett
AFP Day 1: Rising interest rates and blockchain use cases

Banking AFP Day 1: Rising interest rates and blockchain use cases

7m Victoria Beckett
TreasuryXpress Receives Major Growth Investment

EEA TreasuryXpress Receives Major Growth Investment

7m Guest Writer