Trade Off Of Henry Bath Business Unit Of JPMorgan Chase & Co. (NYSE:JPM) On Track
JPMorgan Chase & Co. (NYSE:JPM) was given an ultimate time limit for trade off of its Henry Bath warehouse unit. As reported by a regulatory executive at the U.S. central bank to a Senate banking committee hearing on Jan 15, The U.S. Federal Reserve had asked the bank to sell off the warehouse unit.
The Fed director of bank supervision and regulation, Michael Gibson, said that though it is has issued a timed ultimatum, yet the deadline for JPMorgan Chase & Co. (NYSE:JPM) to get rid of the business has not yet been decided. Yesterday, he assured that the bank has issued quarterly reports to the Fed on its advancements in selling the business.
With its Headquarter in Liverpool, England Henry Bath stores metals- Copper, Aluminum, Nickel, Tin and Zinc at its warehouses in the Netherlands, Italy, Turkey, Singapore and the United States. For JPMorgan, acquiring Henry Bath was a deal of $1.6 billion.
JPMorgan had announced in July 2013 that it would do away with all of its physical commodities businesses, including Henry Bath.
Earlier between Fed and JPMorgan
JPMorgan Chase & Co. (NYSE:JPM) was allowed to own and operate Henry Bath & Son, which is a big metals storage company, by the Fed in 2010. This was after the Fed had issued the ruling in 2005, which barred banks from possessing ownership or indulging into operating any physical commodities businesses, such as warehouses, pipelines and transportation facilities. Two other banks that were subject to the restraints were Citibank and Bank of America Corp (NYSE:BAC). However, eight confidential letters that were exchanged between Fed and JPMorgan later had allowed the bank to engage into commodities businesses.
JPMorgan Chase & Co. (NYSE:JPM) had, since 2012, appealed twice in private letters, to the Fed to let it keep Henry Bath and had succeeded in its appeal each time. Fed had granted extension to the bank till July 2014, to cater to banking law requirements or get rid of the company. However, in the last three years, JPMorgan has shown a profit of $161 million from the business.