NEW YORK (AP) — JPMorgan Chase stock declined more than 2 percent on Thursday, making it one of the worst-performing banks, after a published report said its loss on a bad trade could be far higher than the bank first estimated.
The New York Times, citing an internal report at the bank, reported that the loss could reach $9 billion. JPMorgan's initial estimate was $2 billion when it disclosed the trade in May, although CEO Jamie Dimon said then that the loss could grow.
JPMorgan Chase stock closed down 90 cents, or 2.4 percent, at $35.88. Financial stocks as a group lost 0.2 percent. JPMorgan traded at about $41 before the loss was disclosed and has closed as low as $31 in the weeks since.
The Times story said the $9 billion figure reflected a worst-case estimate by the bank. But because the bank has sold the most volatile part of the trading position, the loss could be $6 billion to $7 billion, The Times reported.
A JPMorgan representative declined to comment.
"The bottom line is the reputation of JP Morgan is hurt," said Paul Miller Jr., an analyst for FBR Capital Markets & Co. "I don't think people care if it is a $6 billion or $9 billion loss."
The company is expected to provide more detail when it reports its quarterly earnings July 13.
"There's not a lot they can give us until they back out of the trade," Miller said. " I don't care what the number is, what I care about is are we done with the trade and do we need to adjust earnings moving forward."
In May, JPMorgan said the loss came from trading in credit derivatives designed to hedge against financial risk, not to make a profit for the bank.
Dimon apologized to shareholders, and days after the loss was disclosed, Chief Investment Officer Ina Drew, who oversaw the trading group responsible for the trade, left the company.
The loss has heightened concerns that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis in the fall of 2008. JPMorgan has lost about $23 billion in market value since the loss came to light.
In a hearing before the House Financial Services Committee last week, Dimon was dismissive when asked if JPMorgan's losses could total half a trillion or a trillion dollars. He replied bluntly: "Not unless the Earth is hit by the moon."
While Dimon avoided putting an exact number on the bank's trading loss, he did say that JPMorgan will have a solidly profitable quarter.
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AP Business Writer Sarah Skidmore in Portland, Ore., contributed to this report.
