JPMorgan profit beats estimates as mortgage revenue soars

Growth Estimates

The IMF reduced its global growth estimate for 2012 to 3.3 percent from 3.5 percent, the slowest since the 2009 recession, and lowered its projection for next year to 3.5 percent from 3.9 percent. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a 1-in-6 chance of growth slipping below 2 percent.

JPMorgan has regained more than $41 billion of the $51 billion in market value it lost after Bloomberg News first reported on April 5 that the company had amassed an illiquid book of credit derivatives at its chief investment office in London. Dimon initially dismissed the news as a “tempest in a teapot” when the bank reported first-quarter earnings.

During the third quarter, JPMorgan’s CIO had a $449 million loss as it closed out a $12 billion index credit derivative position. The loss JPMorgan described as “modest” was on holdings moved to the investment bank, the size of which the company won’t disclose.

The botched bets spawned a series of management changes and dismissals, beginning with Chief Investment Officer Ina Drew, 56, who retired four days after the loss was disclosed on May 10.

Tse, Zubrow

Two senior managers announced plans to depart last week. Irene Tse, who ran the CIO for North America under Drew, told employees she’s leaving to start a hedge fund. Former Chief Risk Officer Barry Zubrow, who now runs JPMorgan’s lobbying operation, said Oct. 5 that he will retire at year-end.

Chief Financial Officer Douglas Braunstein, 51, may also leave his position and join the firm’s investment bank, where he previously led dealmaking, according to a person with direct knowledge of the matter.

Braunstein, who was promoted to CFO in June 2010, is likely to remain in that role through the end of the year, said the person, who requested anonymity because a decision on the move isn’t final. The finance chief was passed over for promotion when Dimon elevated Matt Zames, 41, to co-chief operating officer and required Braunstein to report to him instead of Dimon.

The firm also is being probed over the possible gaming of U.S. energy markets and was subpoenaed in global investigations of interest-rate fixing in London.

Bloomberg News

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