Today, a spokesperson from JPMorgan Chase & Co. (NYSE:JPM) released details on a regulatory decision that would enable the bank to buy back up to $3 billion of its stock during next year’s first quarter. This is an early indicator that the largest bank in the U.S. is beginning to recover after losing billions of dollars in trading losses on a bad derivatives decision.
JPMorgan Chase & Co. (NYSE:JPM) stopped buying stock back in May after officials first released information about the trading losses, which totaled $6.2 billion. In August, bank officials revamped their capital plan and presented it to the Federal Reserve. According to the bank’s quarterly Securities and Exchange Commission filing released today, the central bank approved that new plan on Monday.
The DG Value Funds were up 2.7% for the third quarter, with individual fund classes ranging from 2.54% to 2.84%. The HFRI Distressed/ Restructuring Index was up 0.21%, while the HFRI Event-Driven Index declined 0.21%. The Credit Suisse High-Yield Index returned 0.91%, and the Russell 2000 fell 4.36%, while the S&P 500 returned 0.58% for Read More
The losses which occurred through trading were the result of a rare error made by CEO Jamie Dimon, who is known for bringing JPMorgan Chase & Co. (NYSE:JPM) through the 2008 financial crises. Since May, the bank has made several major changes, including rearranging some of its top executives and pulling back millions of dollars that had been expected to be paid to traders who were involved in the decision which led to the losses.
Regulators’ decision to allow the bank to continue buying back its stock will enable it to continue moving toward its plan to increase the value for its shareholders. Last year JPMorgan Chase & Co. (NYSE:JPM) bought back $9 billion in stocks. In March 2012, after Dimon passed the stress test put forth by the Fed, Dimon announced his plan to pay higher dividends and repurchase no less than $15 billion of the bank’s stock through the end of 2013.
Today’s quarterly filing from JPMorgan Chase & Co. (NYSE:JPM) also showed that the bank’s litigation costs are expected to increase, so officials increased reserves earmarked for legal expenses from $5.3 billion to $6 billion. The increase likely deals with the lawsuit filed by the bank against Bear Stearns, which was acquired by JPMorgan Chase & Co. (NYSE:JPM) in the 2008 crisis.