JPMorgan Profit Hit by Madoff, Weaker Investment Banking (Reuters)
JPMorgan Chase & Co. (NYSE: JPM) reported its fourth-quarter profit fell 7.3 percent, hurt by weakened investment banking revenue and higher legal expenses. The results close a difficult year for Chief Executive Officer Jamie Dimon, after management agreed to some $20 billion of legal settlements in 2013. The hit included $850 million in the fourth quarter due to its deals over its failure to report suspicions of fraud by Ponzi-schemer client Bernard Madoff. Some probes of the largest U.S. bank are only just beginning, Dimon told reporters on a conference call. Aside from legal blows, which some analysts view as a passing problem, JPMorgan's commercial and investment bank is under pressure as deal volume in many areas falls amid lackluster economic growth. Investment banking fee revenue dropped 3 percent to $1.67 billion, and stock and bond trading revenue was unchanged before accounting adjustments. The results from JPMorgan, the first of the major investment banks to report for the quarter, show that rivals such as Goldman Sachs Group Inc and Morgan Stanley may face difficulties, too.
