BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Thursday, 17 January, 2002, 07:16 GMT
Enron and Argentina hit JP Morgan
JP Morgan Chase logo
JP Morgan Chase lost a whopping $332m (230m) during the last three quarters of 2001 due to its financial exposure to the crisis hit Argentine economy and the bankrupt energy trading company Enron.

The fall in net profit was massive; down $1bn from the $708m profits made during the last quarter of 2000.

Trouble in the telecom sector added to the global banking giant's woes during the late autumn.

"Fourth quarter results were particularly affected by our exposure to private equity investments, and to Enron and Argentina," said chairman and chief executive, William Harrison, describing 2001 as a "challenging" year.

Bad loans provisions

JP Morgan Chase set aside $510m in reserves to cover potential losses from lending going forward.

"While these actions hinder current operating results, they lay the groundwork for stronger earnings recovery when market conditions improve," said Mr Harrison.

But such an upturn is not likely anytime soon, said chief finance officer Dina Dublon.

The bank's revenue growth is likely to remain soft for some time, so the focus will be on keeping expenses from rising, she said.

"We're not counting on a full sustained recovery," she said.

Consequently, the bank will probably not "be producing our full earnings potential", she said.

Credit watch

The credit rating agency Standard & Poor's said JP Morgan Chase's losses during the fourth quarter of 2001 were "symptomatic of a series of negative developments that have affected the bank in the course of 2001".

Consequently it downgraded its outlook on the bank's credit worthiness.

"None of the issues, taken individually, would be sufficient to revise the rating," S&P said.

"Taken together, they have had a substantial impact on the past fiscal year, and could lead to further disappointments in performance that would eventually result in a downgrade."

JP Morgan Chase shares fell 4.41% to 36.20.

See also:

17 Jan 02 | Business
Andersen 'warned' of Enron crisis
16 Jan 02 | Business
Argentina receives debt lifeline
13 Dec 01 | Business
Central bank warns on telecoms debt
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories