Boston, MA, 11/18/2013 (wallstreetpr) – The U.S. based national bank JPMorgan Chase & Co. (NYSE:JPM) will pay off $4.5 billion in settlement of investor claims over money lost on mortgage-backed securities just preceding the U.S. housing market collapse. The banking giant will settle claims by 21 institutional investors, which include BlackRock Inc., Metlife Inc., Allianz SE’s Pacific Investment Management Company, the TCW Group and Bayerische Landesbank, among others, in about 330 residential mortgage-backed securities trusts. These securities issued by subsidiary JPMorgan and Bear Stearns, were bought out by JPMorgan Chase (JPM) during the recent U.S. housing market’s crisis, which saw prices plunge disastrously in 2011 and 2012 since the crisis started in 2006. This payoff is in addition to the preliminary $13 billion settlement between JPM and the U.S. federal government over mortgage-backed securities.
USA’s biggest bank assets wise, JPMorgan Chase & Co. (NYSE:JPM) is the third bank after Bank of America and Residential Capital to be embroiled in messed-up mortgage-backed securities issued in the aftermath of the financial crisis and subsequent negotiations with investors. JPM reported its first quarterly loss in 2013, with net revenue of $23.9 billion for the third quarter 2013 declining by 8% from the corresponding FY2012 quarter, as against analyst expectations of $24.2 billion. The banking bellwether also dismayed with losses in earnings per share, declining from the prior year earnings of $1.40 and missing analyst predictions of $1.28. Reeling under falling revenues because of low interest rates, tighter regulations on fees and weak loan sales, JPMorgan Chase & Co. (NYSE:JPM) has come under intense stakeholder pressure to cut costs and up revenues.
Meanwhile, the consumer banking division of JPMorgan Chase & Co. (NYSE:JPM) expects to cut prematurely 4,000 jobs for its consumer business by the end of 2013. JPMorgan is also expected to reduce about 11,000 positions from its mortgage operations by 2013 end, instead of its previous plan to downsize workforce by 13,000 to 15,000 by 2014 end. JPMorgan stocks climbed about 0.86% in November 15 trading on NYSE to post a closing at of $254.87 from the previous close of $54.40. After-hours trading stayed around the closing figure.
