JPMorgan Chase (NYSE:JPM) reported that it spent more than $1 billion on legal costs in the fourth quarter of its fiscal year. Most of the legal costs were due to the bank defending itself from multiple investigations from government regulators. In November, JPMorgan agreed to pay $1 billion in penalties to settle an investigation into the bank’s manipulation of the foreign exchange markets. The bank is also facing investigations into its actions in the alleged manipulation of Libor interest rates.
The legal costs weighed down the company’s results for the quarter. In the same quarter last year, the bank paid $847 million in legal expenses. However, the $2.9 billion in total legal costs for the year were considerably lower than the $11.1 billion in legal expenses paid out in 2013.
The bank reported that its quarterly profit was nearly 7 percent lower than the results reported in the same quarter of last year. In the quarter, net income fell to $4.93 billion, or $1.19 per share. This was a considerable drop from the $5.28 billion, or $1.30 per share, recorded in the same quarter a year ago. Revenue fell 2.3 percent to $23.55 billion. Analysts polled by Thomson Reuters I/B/E/S had expected earnings of $1.31 per share on revenue of $23.64 billion on average.
JPMorgan and its competitors have struggled to adapt to the changes in the financial sector since the financial crisis, including stricter trading and capital rules. JPMorgan’s revenue from fixed-income trading fell 14 percent in the quarter. Revenue from home loans fell $405 million in the quarter, dropping to $1.9 billion.
The bank has also been dealing with the fallout from a hacking attack that revealed the personal and account information of nearly 83 million customers back in October. The breach has caused JPMorgan to invest heavily to improve its risk controls and system security.
