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Entries in Losses (4)

Friday
Jul132012

JPMorgan Reports $5B Profit, Expands Trading Loss

Peter Foley/Bloomberg via Getty Images(NEW YORK) -- JPMorgan Chase, still reeling from trading losses in its investment unit, reported a second-quarter profit of $5 billion on Friday.

Investors were less interested in the largest U.S. bank’s net income than the total losses from bad hedged bets in their chief investment office. They announced that the loss this quarter from that the trade was $4.4 billion; estimates had the loss in the range anywhere from $2 billion to $9 billion.  The bank has yet to make clear if there is a possibility of incurring more loss.

[CLICK HERE TO SEE JPMORGAN'S EARNINGS REPORT]

In a surprise announcement in a Securities and Exchange Commission filing ahead of the earnings report, JP Morgan revised its first-quarter earnings to show an additional loss because traders in the CIO unit were misrepresenting the extent of the losses.

According to the SEC filing, “… the firm has recently discovered information that raises questions about the integrity of the trader marks and suggests that certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter.”

Jim Sinegal, director of financial services research at Morningstar, an investment firm, said the most important discovery from the earnings release is whether the loss is in line with what the company has recently described; that is, whether the problem has been contained.

CEO Jamie Dimon was previously criticized for describing the trading loss as a “tempest in a teapot,” before he later acknowledged that the losses were greater than he was told by his management. His chief investment officer, Ina Drew, resigned in May.

“What Jamie Dimon has done well is under promise and over deliver,” Sinegal said.  “Not only has this escaped his eye as a risk manager -- but to the extent that it got out of hand more than once, if it turns out even bigger than that, you have to wonder if he has as much control as everyone believes him to have.”

“A loss of $5 billion or more would surprise me,” Sinegal said. “I think you would have to reassess your opinion of Dimon and all top risk managers.  It is generally well accepted that JPMorgan has done the best job managing risk of the large banks.”

Copyright 2012 ABC News Radio

Thursday
May102012

JPMorgan Bank Announces Massive Surprise Loss

STAN HONDA/AFP/Getty Images(NEW YORK) -- JPMorgan, in an unexpected announcement, said it saw $2 billion in trading losses in the last six weeks, and may yet see more.

“We have egg on our face,” Jamie Dimon, the massive bank’s CEO, said on a conference call.  “We deserve any criticism we get.”

JPMorgan’s stock was trading about six percent lower in after-hours trading and could very well drag down markets on Friday.

In recent weeks, the financial papers, particularly The Wall Street Journal, have been reporting on how the “London whale,” a trader or traders at JPMorgan’s London operations, has been distorting credit markets with big bets.

Now, apparently, those big bets mean a big hole for JPMorgan.

It is “striking how management and company downplayed the actions of this unit” before coming clean with the losses Thursday, said Todd Hagerman, a senior banking analyst with Sterne Agee.

JPMorgan, one of the largest banks in the world, has $1.4 trillion in assets under management. That figure is equivalent to the gross domestic product of Spain, a country whose financial predicament is worrying global markets right now -- though nobody is saying JPMorgan is in danger of going under because of the newly announced loss.

Copyright 2012 ABC News Radio

Sunday
Aug282011

Hurricane Irene: Billions of Dollars in Losses Expected

ABC News(NEW YORK) -- Hurricane Irene's destructive path through 10 East Coast states left an estimated $7 billion to $13 billion of damage in its wake -- without even accounting for economic losses.

Downed trees and other wind damage could total about $5 billion in personal claims, while flood damage could total about $2 billion in claims, according to a statement released by the Consumer Federation of America. The figure is significantly lower than that of Hurricane Katrina in 2005, the statement noted.

On the high end of estimates, University of Maryland professor Peter Morici said $20 billion of damage and economic losses could be felt throughout the weeks after the storm, and Maryland-based Kinetic Analysis Corporation estimated the damage at $13 billion.

Morici noted that the economic losses from closed businesses and transportation throughout the region could increase that number by another $20 billion in the coming days.

Officials from the Federal Emergency Management Agency said it was to early for federal damage estimates.

With more than 11,000 flights canceled and train service around the region suspended indefinitely, travelers will begin the waiting game to get out of town.

Airports in New York, New Jersey, Connecticut, Rhode Island, New Hampshire, Massachusetts and Maine are all expected to reopen Monday, while officials at Philadelphia airport said some flights might begin to arrive late Sunday, though departures will still be suspended.

In Philadelphia, subways, busses, and trolleys began to reopen on Sunday, though regional rail service remained suspended.

Mass transit in and around New York City were expected to remain at least partially closed until midday Monday.

Copyright 2011 ABC News Radio

Friday
Jan212011

Bank of America Reports $1.2 Billion Fourth Quarter Loss

Photo Courtesy - Getty Images(CHARLOTTE, N.C.) -- Bank of America lost $1.2 billion in the fourth quarter of 2010, the company reported Friday, or $0.16 per share. Overall, the company lost $2.2 billion in 2010, or $0.37 per share.

“Results for the most recent quarter also include a $4.1 billion provision expense for outstanding and future mortgage repurchase claims,” the company said. “Also included in the company's fourth-quarter results are $1.5 billion in litigation expenses, excluding fees paid to external legal service providers, primarily in the company's consumer businesses, and lower sales and trading revenues.”

Bank of America Corporation was down in pre-market trading.

Copyright 2011 ABC News Radio







ABC News Radio