New York - JPMorgan Chase’s profit fell 7.3 percent in the fourth quarter of last year after legal costs, including $2.6 billion (R28bn) in settlements linked to Bernard Madoff’s Ponzi scheme, ended a three-year streak of record annual earnings, the lender said yesterday.
The biggest US bank said net income declined to $5.28bn from $5.69bn a year earlier. Earnings a share excluding the Madoff settlement and other one-time items were $1.40. A survey of 22 analysts had estimated $1.37 on average.
Chief executive Jamie Dimon is whittling down the firm’s list of legal woes that include allegations it misled buyers of mortgage bonds, rigged markets and turned a blind eye to suspicious activity by customers.
The Madoff agreement, which the bank said last week had cut fourth-quarter profit by about $850 million, capped a year in which the banking group spent more than $23bn on legal settlements.
“These costs were far higher than anyone anticipated, but they’ve made tremendous progress putting things behind them,” said Pri de Silva, a senior banking analyst at CreditSights in New York. “Things should look better from here.”