Is There An End To JPMorgan Chase & Co. (NYSE:JPM) Settlements?

Posted by admin December 5, 2013 0 Comment 1048 views

JPMorgan Chase & Co. (NYSE:JPM)’s stock at $57.19 is trading along its fresh 52 week high of $58.14 reflecting investor confidence into various litigations and settlements the bank is dealing with in the post economic-crisis era. However in a recent blow the European Union antitrust regulators fined the six financial institutions including JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc. (NYSE:C), Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) and Deutsche Bank AG (USA) (NYSE:DB) for benchmark rigging.

The fine imposed recently is worth $2.3 billion (EUR 1.7 billion) and the tally now counts at $6 billion in aggregate for the penalties related to manipulation of London interbank offered rate and its euro equivalent, Libor and Euribor, respectively.

The Non-U.S. Banks

Deutsche Bank AG (NYSE:DB) has been scolded with highest fine of EUR 725.4 million and has yet to be fined by U.K. and U.S. regulators who have been investigating separately into benchmark interest-rate fixing. Royal Bank of Scotland Group plc (ADR) (NYSE:RBS), U.K. based brokerage firm RP Martin and France’s Societe Generale were among others to be fined.

The U.S. Banks

The U.S. banks including JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc. (NYSE:C) were penalized for the first time in a scandal in which $400 trillion worth of products were priced at rates fiddled by traders. Among the fines imposed on JPMorgan, it has only settled those relating to yen denominated Libor and not Euribor.

The Analyst Call

Equities research analysts at Zacks now carry #3, Hold rating for JPMorgan Chase & Co. (NYSE:JPM)’s common stock given the consistent improvement in retail banking performance and cost containment efforts. The analyst also considered continued synergies from business diversification as one of the key strengths to continue holding this stock in the portfolio; however, they strongly discourage any further investment in the stock.

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