Madoff costs hurt JP Morgan profits

Written By Unknown on Selasa, 14 Januari 2014 | 20.24

14 January 2014 Last updated at 08:10 ET

US bank JPMorgan Chase has reported a drop in profit for the last three months of 2013 after legal costs in a case relating to the fraudster Bernie Madoff dented earnings gains.

Net income fell 7.3% for the fourth quarter to $5.3bn (£3.22bn), from $5.7bn in the final quarter of 2012.

The bank said one-off items had damaged income after tax by $1.1bn.

JP Morgan was Madoff's principal bank and their business relationship dated back to the 1980s.

The 75-year-old Madoff is currently serving a 150-year prison sentence in the US after being found guilty of defrauding investors.

Last week, JP Morgan agreed to pay $2.6bn to settle government and private claims resulting from its handling of Madoff accounts.

It said then that that would take an extra $850m from fourth-quarter earnings to cover expenses.

The bank's chairman and chief executive, Jamie Dimon, said the move was "in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward".

Scandals

Over the past year, JP Morgan has paid some $20bn to regulators for various violations relating to the US financial crisis, including the so-called "London whale" trading loss, in which a single trader wracked up losses of $6bn.

It has also been caught up in another high-profile banking scandal - the manipulation of a key interest rate, the London inter-bank offered rate, or Libor.

The bank also made some one-off gains as well as the one-off losses resulting from the legal side.

These included income from the sale of Visa shares, as well as from the sale of its prime property known as One Chase Manhattan Plaza in New York.

Revenue for the fourth quarter was $24.1bn, 1% lower than in 2012.


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