Investors who want certainty about legal costs for financial firms should not buy bank stocks, JPMorgan Chase CEO Jamie Dimon told CNBC.
“We have been very, very consistent about legal. It’s lumpy. It’s not predictable, particularly by quarter, and that’s what we’ve got to deal with, ” Dimon said during an interview from the World Economic Forum in Davos, Switzerland, the report said.
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“I’ve told our analysts it’s going to be a number, and one day it will be a lot less. It will normalize, and it will still be higher than it has been in the past, but I can’t make something predictable that’s not predictable”, the CEO said.
JPMorgan reported a 6.6 percent drop in fourth quarter profit, which was impacted by more than $1 billion in legal costs related to government investigations. The bank agreed in November to pay $1 billion to settle a probe into its foreign exchange business, CNBC said.
During a conference call with reporters following the earnings report, Dimon said banks were “under assault” from regulations. On Wednesday, he walked back some of his comments made during the call, the report said.
“Let me take back some of those words. We have worked very closely with regulators all the time, ” he said. “I was referring to the fact that there are lots of different regulators. It’s hard to deal with. We’re going to deal with it. My job is to deal with this, not to complain about it”, he said, according to CNBC.
Dimon also called JPMorgan a “port of safety in the storm, ” noting that the company bought Bear Stearns and Washington Mutual when those firms were failing during the height of the financial crisis. He said JPMorgan rolled over hundreds of billions of dollars in loans at no additional price at that time, CNBC said.
In its current form, JPMorgan will be a harbor in the next storm, and diversification makes it stronger, he said. “You want me to be a port. You want me to be there. We serve governments. We serve certain companies in 20 countries, 30 countries, 40 countries. We move six to 10 trillion dollars a day. You don’t want a weak JPMorgan”, he added, the report said.
Meanwhile, in a Bloomberg report, Dimon called JPMorgan a “fortress company” and said its many businesses serve customers well.
“It has delivered to clients, and its diversification is the reason why it’s had less volatility of earnings and was able to go through the crisis and never lost money ever, not one quarter, ” Dimon said last week. “In any future crisis, we’re going to do fine”, he added, Bloomberg said.
JPMorgan rose 0.4 percent to $55.48 at 9:30 a.m. in New York. The shares declined 4.1 percent in the past year through yesterday, compared with the 4.9 percent slide of the 24-company KBW Bank Index, the report said.
