Börse & Märkte

JPM books $9.2b loss on legal charges/Dimon gets away unscathed, again

JPM reports Q3 net loss of $380million on legal costs, the first quarterly loss under CEO Jamie Dimon. You could see it coming. London Whale and mis-selling MBS being the two notable disasters for JPM, the banking giant booked a legal charge $9.2billion. London Whale was an embarrassing incident for the bank, putting it under severe scrutiny by regulators, investors and even policymakers. Legal charges meant the bank’s revenue for Q3 fell short of expectations, in at $23.9billion versus near $26billion last year. The bank is still in $11billion in settlement talks with US authorities over mis-selling MBS before the financial crisis but is likely to have that sorted soon.

 

Reputation of course, takes a bit of knocking but more so of Jamie Dimon, less so the bank itself. Though he’s steered JPM into financial stability since the financial crisis of 2008, Dimon’s lack of oversight of certain operations do raise questions over his future at JPM. The fact that he’s still the boss at JPM, when you compare him to say former Barclays CEO, Bob Diamond, who resigned in the wake of the libor scandal last year which saw the bank pay a penalty of £290million, one cannot help wonder why Dimon is getting away unscathed without dismissal by his board? It must be noted that with JPM’s market cap is near $200billion, these legal charges can be absorbed without material impact to 2014 FY earnings. So long as they pay the bills, the market isn’t too concerned about JPM’s future – the shares are responding to just that by trading higher on Wall Street.