CHARTS: JPMorgan Income Bounces Back, but Legal Costs Still a Drag

JPMorgan's profits fell 7.3 percent last quarter, in part on Madoff-related legal expenses.


Paying more than $1 billion in legal fees in a single quarter would be a drag on any company's earnings statement, even when that company is the largest bank in the U.S. That's one of the lessons from JPMorgan Chase's Tuesday morning earnings. The litigation-besieged company reported $5.3 billion in net income in the final three months of 2013, a decline of 7.3 percent from the fourth quarter of 2012. Quarterly profit per share was also down from $1.39 in the fourth quarter of 2012 to $1.30 last quarter.

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Legal expenses totalling $1.1 billion were in part to blame for those declines, in a quarter that ended just before the bank agreed to pay $2.6 billion in settlements related to the Bernard Madoff Ponzi scheme.

However, $1.1 billion is dwarfed by the company's $9.2 billion in legal expenses in the third quarter, which helped to pull JPMorgan's net income into negative territory, giving CEO Jamie Dimon his first quarterly loss during his tenure.

(JPMorgan Chase)

Source: JPMorgan Chase

The bank has put some significant legal issues behind it in the last year – the Wall Street Journal last week counted more than $25 billion in recent settlements, not counting the Madoff settlement – but there is the potential for more drags on income in the future. There are currently investigations into the bank's hiring practices in Asia, as well as questions about whether it manipulated interest rates and currency benchmarks, according to Bloomberg.

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