NEW YORK -- JPMorgan Chase, the biggest U.S. bank by assets, reported a rare quarterly loss after setting up a big reserve for legal expenses.
The bank had to absorb a reserve for litigation expenses of $9.2 billion in the July-to-September period, pushing the lender to a loss of $380 million compared with a profit of $5.7 billion a year earlier.
Last month, JPMorgan agreed to pay $920 million and admitted that it failed to oversee trading that led to a huge $6 billion loss last year -- an episode known as the London Whale. The bank is also said to be discussing an $11 billion national settlement with the Department of Justice over mortgage-backed securities. The securities lost value after a bubble in the housing market burst and helped spur the financial crisis.
The bank said it had a total of $23 billion in reserves to cover potential litigation costs, a figure it said it hasn't disclosed before, including the $9.2 billion for the third quarter. JPMorgan CEO Jamie Dimon said that the amount reflected the "reality" the bank now faces but, speaking on a call with reporters, declined to give specifics on the legal costs it is anticipating.
"It's painful," Dimon said on a call with reporters. "But what's more important is the underlying performance of the company."