JP Morgan Chase announced a Q212 profit of US$5bn on revenue of US$22.9bn. The results were marred by credit trading losses of US$4.4bn in its London offices resulting from bad derivatives trades in its chief investment office (CIO). These resulted from the nefarious activities of the so-called ‘London Whale’, trader Bruno Iksil, who has since left the bank.
The US$4.4bn loss resulting from Iksil’s activities was more than double the initial estimate made by the bank’s chief executive officer (CEO) Jamie Dimon, when he first announced the loss on 10 May. However, recent reports had suggested an even higher upward revision to as much as US$9bn might be the real impact of Iksil’s profit-seeking ‘hedges’.
JP Morgan also revised its Q112 income downwards by US$459m and said that some of its traders “may have been seeking to avoid showing” the full extent of their losses, which had resulted from “a material weakness” in internal controls. The high profits announced today would have been significantly higher but for the London office.
Dimon explained that the bank had reviewed its CIO losses and believed that the bad trades were restricted to the unit. It was reported earlier this week that it will seek to reclaim millions of dollars from individuals responsible for the trading losses, beginning with its former CIO head Ina Drew who has also left the bank.
Using data for predictive analytics is the future of banking success, argued Jean-Laurent Bonnafé, CEO of BNP Paribas, in his session on how the bank is reinventing its approach to innovate with and for corporates.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off day two of the Singapore Fintech Festival, Deloitte Chairman David Cruikshank said that fintech is significant for three reasons. First, customer expectations of services are higher than ever. Second, barriers to entry are lower than before. And finally, financial institutions (FIs) face a threat of what a competitor might do.