JPMorgan Chase on Friday reported a net loss of $380 million for the third quarter, as the nation’s largest bank grapples with a raft of regulatory and legal woes.
The added costs dragged down JPMorgan’s results as the bank reported a net loss of 17 cents a share.
JPMorgan’s earnings were eroded, in large part, by a hefty legal expense of $9.2 billion.
“While we had strong underlying performance across the businesses, unfortunately, the quarter was marred by large legal expense,†Jamie Dimon, the bank’s chief executive, said in a statement.
Excluding the one-time costs, JPMorgan’s earnings were $5.8 billion, or $1.42 a share,which beat Wall Street analysts’ expectations of $4.65 billion, or $1.21 a share.
Revenue was $23.9 billion, compared with $25.9 billion in the period a year earlier. Analysts had estimated revenue of of $24.06 billion.
The third-quarter earnings report came as JPMorgan is enmeshed in protracted negotiations with the Justice Department to resolve investigations into questionable mortgage practices.
During the negotiationsâ€"which have occurred in fits and starts-JPMorgan has offered to pay a fine of roughly $7 billion and provide $4 billion in relief for struggling homeowners to wrap up a range of mortgage-related headaches, according to people familiar with the matter. The settlement is still in flux, though, and the monetary penalties could change.
JPMorgan “continues to seek a fair and reasonable settlement with the government on mortgage-related issues - and one that recognizes the extraordinary circumstances of the Bear Stearns and Washington Mutual transactions, which were undertaken at the request or encouragement of the U.S. government,†Mr. Dimon said.
Mr. Dimon’s reference to a “fair and reasonable settlement†evokes his earlier statements, which have called the government’s investigations related to Bear Stearns unfair. JPMorgan purchased the flailing bank during the depths of the financial crisisâ€"a deal that was blessed by the federal government.
Adding to the bank’s legal costs, JPMorgan agreed to pay $1 billion in September to resolve sweeping investigations into the bank’s multibillion-dollar trading loss last May. As part of its $1 billion payout, JPMorgan also settled investigations from the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau into the bank’s credit card products.
