Nobody ever wants to hear the phrase: ‘Sorry, boss, we’ve lost a billion dollars.’ But it was actually four and a half time worse than that, according to the latest figures from JP Morgan Chase, which has just realised that its traders lost $4.4bn – considerably more than originally thought. Just in time for the weekend, too.
The bank said it has had to revise down the net income figure by around $460m to $4.92bn because of some information raising ‘questions about integrity’ on the value of certain trades. This sounds a bit like City speak to us, and doesn’t really shed light on the matter for ordinary folk. But what we do know is that the loss is more than twice the $2bn figure that swept international media last month, and that can’t be good.
On the plus side, the bank’s Q2 results were much healthier. They showed a profit of $4.96bn, which contrasts with a $471m loss in the same period the previous year. The results also included the information about the trading loss. The bank’s chief executive, Jamie Dimon, who has been outspoken against pressure for tighter regulation on banks, is obviously doing something right. Following the shareholders’ conference call with Dimon following the announcement of the results, shares soared 3.9%. Evidently investors are happy with the steps he has taken to get some closure on the trading loss catastrophe.
Again, the banking community really is suffering some mighty reputational blows at the moment. The question remains, will we see any heads roll, or are governments the world over too deep in the financial hocus pocus themselves to do anything meaningful about it…?