JPMorgan Chase posted its first quarterly loss under CEO Jamie Dimon in the third quarter of 2013.The quarterly loss was $380 million compared to a profit of $5.71 billion a year ago. It was the first time the bank failed to report a profit since the second quarter of 2004.Legal fees were the major contributing factor to the bank’s performance. The bank took a $7.2 billion after-tax charge to cover the cost of lawsuits and regulatory fines.
The legal expenses don’t end in the third quarter. The bank said that it is holding $23 billion in reserve to cover rising expenses, penalties and legal bills that could continue for several more quarters. The growth in litigation and legal expenses is the result of increased regulation by government agencies, state regulators and the Consumer Financial Protection Bureau.Penalties for Chase’s credit card business also pulled down earnings. The CFPB made Chase repay $309 million to customers that were improperly sold “add-on” products such as identity theft protection and credit card monitoring.