Today is a somewhat unusual kind of day, namely kind of a bad one for Jamie Dimon. His bank’s fourth-quarter profit dropped by 40% because, unlike some other banks already enjoying the undeserved fruits of their lobbyists’ labors, JPMorgan has to spend a little money to make a whole lot of money this year. Specifically, $2.4 billion.
Charges related to changes in the value of the bank’s deferred tax assets and the need to repatriate profits held overseas. Such charges could reduce the earnings the bank reports, although investors are likely to look to the core operating results since these hits will be one-time in nature…. Mr. Dimon said the bank expects to have roughly $3.6 billion in additional earnings next year as a result of the tax overhaul….
Oh yea, also, there was that $273 million it lent to a South African mattress company worth only half as much as it used to be. That’s probably gone, too. But, on the bright side, JPM thinks some other banks also woke up this week, glanced at the drooling, snoring Steinhoff International Holdings lying next to them, and shuddered.
The bank disclosed a loss of $143 million on a “margin loan to a single client” in its results on Friday. It also noted a credit provision of $130 million tied to the same client, which means the bank expects to take that loss but could later release the reserves if it doesn’t….
“Others of our peers may also be in that facility and also have losses in credit,” Ms. Lake said, declining to comment further on the matter.