JPMorgan Earnings Collapse Under Regulatory Pressure
JPMorgan Chase & Co. (NYSE:JPM) jumped about 1 percent in premarket trading on Friday after reporting its third-quarter financial results. The firm, America’s largest bank by assets, reported an unexpected net loss of 17 cents per share for the quarter, largely the result of enormous legal expenses. Analysts were expecting a profit of about $1.19 per share, which compares against year-ago earnings of $1.40 per share.
“While we had strong underlying performance across the businesses, unfortunately, the quarter was marred by large legal expense,” Chairman and CEO Jamie Dimon said in the report. “We continuously evaluate our legal reserves, but in this highly charged and unpredictable environment, with escalating demands and penalties from multiple government agencies, we thought it was prudent to significantly strengthen them. While we expect our litigation costs should abate and normalize over time, they may continue to be volatile over the next several quarters.”
JPMorgan reported a pretax expense of $9.15 billion in the third quarter, or $7.2 billion after tax, for corporate legal expenses.