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.
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