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What $13 billion means to JPMorgan

Monday, October 21, 2013 - 01:14

Oct. 21 - JPMorgan Chase's proposed $13 billion settlement comes out to more than one-seventh of last year's 2012 revenue of $99.9 billion. Conway G. Gittens reports.

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JPMorgan Chase has agreed to pay a record $13 billion to settle investigations stemming from the financial crisis, according to a source. $13 billion is roughly just more than one-seventh of the bank's annual sales last year, on that basis it would only take JPMorgan about a month and a half to raise that cash through revenues alone. But the bank won't even have to wait that long. $23 billion has already been set aside for legal settlements, according to the bank's admission. In terms of quarterly profits, JPMorgan usually pockets about $5 billion to $6 billion, which means the proposed settlement would only eat up a little more than two quarters worth of earnings. Consider one more fact, JPMorgan's stock gives the company a more than $200 billion market value, which is about 15 times the amount proposed to put some of its legal troubles to bed. This settlement largely deals with bad loans made by Bear Stearns and Washington Mutual, two financial institutions JP Morgan rescued during the crisis at the encouragement of the government. Even with the record settlement, CEO Jamie Dimon's legal woes aren't done. America's largest bank still faces criminal probes and investor lawsuits.

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What $13 billion means to JPMorgan

Monday, October 21, 2013 - 01:14