JPMorgan Chase Posts Loss As Earnings Battered By Legal Costs
News: New York-based JPMorgan Chase has posted a loss of US$380mn for the third quarter of 2013 as it was battered by provisions against legal costs, the BBC reports. The bank earmarked some US$9.2bn against legal costs for the period, forcing results that are a far cry from the US$5.7bn in profit it posted in the third quarter of 2012. Chief executive Jamie Dimon insisted that - apart from the bank ' s massive legal bills - the lender ' s underlying business remained strong.
BMI View: Admittedly, client loan growth has averaged just 4.3% in the first six months of 2013, but we expect that lending will accelerate in the second half of the year. We believe that US households are nearing the end of their long deleveraging cycle, and that the return to household credit growth will result in banks' total assets growing at the most rapid rate since 2008. Although nonfinancial domestic businesses have been expanding their outstanding debt since Q410, total household debt continues to shrink due to contractions in outstanding housing related debt, suggesting that households will be the key to stronger asset and loan growth.