JP Morgan Chase’s profit drops

<p>The bank’s fourth-quarter profit fell 6.6 per cent.</p>

US banking giant JP Morgan Chase has seen its profit drop 6.6 per cent in the fourth quarter of 2014, dragged by legal costs. It said fixed-income trading revenue was down 23 per cent and legal costs were about twice as high as initially forecast.

The bank paid almost $1 billion (£659 million) in costs due to a range of investigations into alleged wrongdoing, and had set aside more money to cover bad debts.

The bank also settled a related lawsuit this month, agreeing to pay institutional investors about $100 million, and still faces a criminal probe from the Justice Department.

"Banks are under assault," leading chief executive Jamie Dimon told CNBC today (January 14th). "We have five or six regulators coming at us on every issue."

"Obviously companies make mistakes. We try to resolve it, we try to fix it, we admit it," he said.

Net income declined to $4.93 billion, from $5.28 billion a year earlier, according to a statement from the bank. 

Chief financial officer Marianne Lake warned investors last month that the bank would probably report a “high teens” percentage drop in trading revenue, Bloomberg reports. Most of the decline stems from the sale of a physical-commodities business and higher interest costs tied to preferred stock, she said.

In 2013, JPMorgan Chase agreed to a record $13 billion settlement with US authorities for misleading investors during the US housing crisis and collapse in prices.

However, the bank has seen its profit soar in the third quarter of 2014, when it posted a $5.6 billion profit.

JPMorgan fell 1.8 per cent to $57.80 in early trading today in New York.

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.