Remember that $2 billion that JPMorgan Chase (NYSE:JPM) said it lost in bad trades back in May? Well, turns out the loss could be a lot bigger than the bank first admitted.
JPMorgan Chase’s CEO Jamie Dimon had previously warned that the losses could grow to as much as twice the amount initially reported.
However, sources have told the New York Times that the credit derivative losses had grown to as much as $9 billion in as the bank attempted to extricate itself from the investments.
Shares of JPMorgan chase fell more than 4% in mid-day trading on Thursday as investors digested the news.
That number comes from financial forecasting models inside JPMorgan. Those models had predicted a “worst case scenario” loss of between $8 billion and $9 billion back in April, but the losses have continued to mount.
Since the bank still has positions in credit derivatives, government regulators remain uncertain of the bank’s final toll, with their estimates currently ranging from $6 billion to $7 billion.
JPMorgan will have to reveal at least some data on the full scale of the loss when it reports second-quarter results next month. The bank anticipates turning a profit for the quarter, regardless of the size of the credit derivatives loss.