JPMorgan Profit Hit by Madoff, Weaker Investment Banking

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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.

Paul Dykewicz

Paul Dykewicz is the editor of StockInvestor.com and the editorial director of Eagle Financial Publications in Washington, D.C. He writes and edits for the website, as well as edits investment newsletters, time-sensitive trading alerts and other reports published by Eagle. He also is an accomplished, award-winning journalist who has written for Dow Jones, USA Today and other publications, as well as served as business editor of a daily newspaper in Baltimore. In addition, Paul is the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain." He received his MBA in finance from Johns Hopkins University, where he was a two-time president of the school's Finance Club. In addition, Paul has a bachelor's degree from the University of Michigan and a master's degree in journalism from Michigan State University. Outside of work, Paul volunteers with a faith-based organization to assist the poor in Southeast Washington, D.C., to learn personal finance skills to lift themselves out of debt.