JPMorgan trading loss grew to $US4.4bn

13 Jul 2012, 11:35 pm   -   Source: AAP

JPMorgan Chase says its loss from a highly publicised trading blunder has grown to $US4.4 billion.

JPMorgan Chase, the largest bank in the United States, says its loss from a highly publicised trading blunder has grown to $US4.4 billion ($A4.36 billion), more than double its original estimate.

The bank also says it's reducing its net income for the first quarter by $459 million because it's discovered information that "raises questions about the integrity" of values placed on certain trades.

CEO Jamie Dimon said on Friday the bank had closed the division responsible for the bad trade and moved the remainder of the trading position under its investment banking division.

Overall, JPMorgan said it earned $5 billion or $1.21 per share for the second quarter, which covers April through June and includes the bank's disclosure of the trading loss on May 10.

Analysts surveyed by FactSet, a provider of financial data, had expected JPMorgan to earn 76 cents per share. JPMorgan stock was down 49 cents or 1.4 per cent at $33.55 in premarket trading.

Just three months ago, JPMorgan was viewed as the top American bank guided by Dimon's steady hand. Since the disclosure of the trading loss, however, that reputation has been eroded.

Dimon, who originally dismissed concerns as a "tempest in a teapot," has appeared before Congress twice to apologise and explain himself, and several government agencies have launched investigations.

He was to speak before Wall Street analysts later Friday.

JPMorgan has lost about 15 per cent of its in market value since the loss came to light.

The bank could take back pay from executives in charge of the division where the losses occurred. Activating the so called "clawback" procedure would be a JPMorgan first.

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