JP Morgan Chase Shrugs Off London Loss
America's biggest bank has surprised markets by posting record quarterly profits despite the fallout from its £3.7bn trading losses in London.
JP Morgan Chase said it made $5.7bn (£3.5bn) in the three months - a rise of 34% on a year earlier - driven by a recovery in returns from mortgage lending.
Analysts said the result signalled that the largest US bank by assets was recovering from the so-called "London whale" trades.
It emerged in May that bets in financial markets that were designed to protect the bank by hedging against its other investments, had spectacularly backfired.
The complex, but legitimate, derivatives trades were incurred by its Chief Investment Office in London.
JP Morgan said while the writedown was mostly felt in its first half there was a continuing "modest loss" from the trades in its third quarter.
While revenue from its fixed income trading revenue rose, helped by the Federal Reserve programme to buy mortgage debt, revenue from mortgage lending rose 36% as the US housing market continued its recovery from the bubble that started deflating five years ago.
"We believe the housing market has turned the corner," Chief Executive Jamie Dimon said in a statement.