11 May 2012

Biggest US bank reveals huge loss

9:15 pm on 11 May 2012

The largest bank in the United States, JPMorgan Chase, says it expects to lose billions of dollars over the next three months because of bad bets by its traders.

Shares in JPMorgan and other major banks fell after the announcement.

JPMorgan Chase, the biggest US bank, has revealed a surprise trading loss of at least $US2 billion on complex investments made by its traders.

Chief executive Jamie Dimon blamed "errors, sloppiness and bad judgement" for the losses and warned "it could get worse".

The risky hedging strategy could cost the bank an additional $US1 billion, he added.

JPMorgan shares dropped 7% in after-hours trading, and other bank shares also fell.

Goldman Sachs, Citigroup and Bank of America suffered heavy losses in electronic trading after the market close on Wall Street.

Shares in European banks were also affected, with Barclays falling 2.85%, Deutsche Bank down 2%, and BNP Paribas 2.6% lower.