JPMorgan Chase has had a bad year. Not only has the bank just reported its first quarterly loss in more than a decade; it has also reached a tentative deal with the Justice Department to pay a record $13 billion to settle a number of outstanding probes of its residential mortgage-backed securities business.
The deal includes to pay $4 billion to settle claims that it misled the government-sponsored mortgage agencies Fannie Mae and Freddie Mac about the quality of billions of dollars of low-grade mortgages that it sold to them.
(...) J.P. Morgan disclosed last week that it set aside $9 billion additional legal reserves in the third quarter, giving it a total of $23 billion to absorb future settlement and lawsuits.
The total penalty will consume more than half of last year's profit of the investment bank, which amounted to 21.3 billion dollars. Among the companies listed in the Dow Jones Industrial Average gains above $ 13 billion in 2012, recorded only seven companies. It is possible that part of the penalty JPMorgan Chase could be tax deductible.
Since the recent financial crisis six largest U.S. banks had incurred costs of legal proceedings a total amount of more than $ 100 billion. It's more than cashing their shareholders in the form of dividends over the last five years.
regards,
oscarjp
No comments:
Post a Comment