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JPMorgan Profit Tops Forecasts, Despite Trading Losses

The firm says the bad trades have cost $5.8 billion so far


JPMorgan Chase (NYSE:JPM) revealed its second-quarter results this morning. The announcement took on added drama due to the bank’s recent trading losses and rumors that it would claw back compensation from executives involved in its Chief Investment Office (CIO), where the losses occurred.

The bank reported earnings of $5 billion, down from $5.4 billion during the same time last year. EPS came in at $1.21, down from $1.27 last year, but surprising Wall Street, which was looking for 70 cents, USA Today noted.

JPMorgan Chase Preparing Clawback Announcement
JPMorgan Chase Preparing Clawback Announcement

Revenue for the second quarter was $22.9 billion, topping analysts’ estimates by over $1 billion. Investors liked the news, sending JPMorgan Chase shares up more than 4% in Friday morning trading.

Despite the good numbers, the credit derivative trading losses still weighed on the firm. JPMorgan said it would restate its first-quarter earnings by $459 million to account for more losses resulting from the bad trades. It also admitted losing $4.4 billion on the trades during the second quarter, up from the earlier estimate of $2 billion.

With today’s announcement, the total losses on the credit derivatives trades have hit $5.8 billion.

The bank said it would demand clawbacks amounting to at least two years worth of stock and options compensation from former executives at its CIO. Commenting on the results, CEO Jamie Dimon said Ina Drew, former head of the CIO, had offered to give back the maximum amount of money demanded by the bank.

Article printed from InvestorPlace Media,

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