JPMorgan Profit Plunges as Jamie Dimon Hails 'Some Significant Issues Are Behind Us'
JPMorgan Profit Plunges as Jamie Dimon Hails 'Some Significant Issues Are Behind Us'Reuters

JPMorgan's first quarter profits plunged 19% year-on-year after the Wall Street giant stumped up billions of dollars in regulatory settlements and fees and tussled with market uncertainty over the global economic recovery.

JPM revealed in its latest financial results statement that net income fell to $5.27bn (£3.2bn, €3.8bn), from $6.53bn in the same quarter last year.

However, JPM's leader Jamie Dimon said that some of the biggest regulatory scandals are behind the bank and they are progressing well with existing litigation issues.

"We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter," said Dimon.

"We reached several important resolutions – Global RMBS (mortgages), Gibbs & Bruns, and Madoff. It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward.

"I am proud of this Company, our employees and what we do every day to serve our clients, customers and communities. We are increasingly optimistic about the future of the U.S. economy and will continue to do our part to support growth, economic development and the creation of new jobs around the world."

Raft of Litigation Issues

JPM has faced a raft of investigations and lawsuits over a range of areas for the last few years however 2013 and the start of 2014 marked one of the most costly periods for the bank.

In January this year, US authorities announced that JPM will pay more than $2bn of penalties to settle charges by US federal authorities that it failed to report suspicious activity involving Bernard Madoff's Ponzi scheme.

The $2bn sum includes the largest forfeiture a bank has ever had to pay to resolve anti-money laundering violations.

As part of the deal, JPMorgan is admitting to a laundry list of failures to explore red flags it found. This led to the government's conclusion that it violated laws requiring it to monitor customer activity for money laundering during its two-decade relationship with Madoff, authorities said.

In November 2013, JPM pledged to pay the largest ever amount by a public company to settle lawsuits with regulators, after the bank admitted wrongdoing in selling poor-quality mortgage-backed securities to state-controlled firms.

JPM said it will pay the $13bn fine to the government, in order to settle claims that it misrepresented the quality of its mortgage assets in the lead up to the financial crisis.

The deal includes a $4bn relief package with US Department of Housing and Urban Development, and a $4bn settlement with the Federal Housing Finance Agency, which manages government mortgage financing companies Fannie Mae and Freddie Mac.

However, the US Department of Justice said that the settlement does not clear JPM or its employees from any possible criminal charges.

The bank has recently been suffering from high costs related to a number of lawsuits. In October, JPMorgan set aside $23bn to cover litigation expenses.