11.05.2012
By Simon Miller
JP Morgan (JPM) shares fell 6.5% after the close of trading in New York after it revealed it had $2bn (£1.24bn) in trading losses in the past six weeks.
In a conference call with investors, JPM's chief executive Jamie Dimon said the losses stemmed from its Chief Investment Office which made bets on its credit default swap positions.
The company admitted that the losses were linked to trades done by the so-called "London Whale" - which JPM initally denied when reports surfaced in the Wall Street Journal.
Dimon said the strategy was "flawed, complex, poorly reviewed, poorly executed and poorly monitored" and called the mistake "egregious and self-inflicted".
He added: "We will admit it, we will fix it and move on."
However, the CEO said the bank was still profitable and that the trading loss had been offest by around $1bn from the sale of other financial assets.
"While we don't give overall earnings guidance and we are not confirming current analyst estimates, if you did adjust current analyst estimates for the loss, we still earned approximately $4bn after-tax this quarter give or take," Dimon said.
JPMorgan shares fell around 6.5% to $38.09 in after-hours trading but have slightly recovered to $40.74 (09.25 BST). However, as a major London trader, the loss has weighed on the FTSE 100 this morning with it falling 15.93 to 5,528.02.
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