Thursday 22 March 2018

Dimon's risk reputation on the line as JPMorgan faces analysts on loss

Dawn Kopecki

JAMIE Dimon will seek to restore investor confidence this week after a trading loss wiped out $39bn of JPMorgan Chase's market value and marred his reputation as one of the industry's best risk managers.

In a departure from his customary earnings-day conference call, Dimon will meet analysts for two hours tomorrow at the bank's New York HQ to field questions about the loss and what he's doing to contain the damage.

The firm also is being probed over the possible manipulation of US energy markets and was subpoenaed in global investigations of interest-rate fixing.

There has been a "sudden change of perception in the company," said Nancy Bush, an analyst at SNL Financial, a research firm based in Charlottesville, Virginia.

"I've been watching banks for 30 years now and when they lose the luster, it is extremely hard for them to get it back, particularly when you have someone who was built up and lionised like Dimon."

Bush said the 56-year-old chief executive officer did an "admirable job of saying nothing" when he appeared before Congress twice last month to testify about the trading loss, which stemmed from bets on credit derivatives at the firm's chief investment office in London. "But I don't know if that can go on," Bush said.

JPMorgan intends to reclaim millions of dollars in stock from executives involved in the second quarter trading loss, including former chief investment officer Ina Drew, and may disclose those details tomorrow when the company announces results, the Wall Street Journal reported.

The trading blunders will cost just over $5bn in the quarter, in which the bank is expected to report a profit. (Bloomberg)

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