JP Morgan boss says US housing market has turned the corner
- 12 October 2012
- From the section Business
Jamie Dimon, chief executive of JP Morgan Chase, has said the US housing market "has turned the corner".
He said that his bank, which is the biggest in the US by assets, would be reducing the amount it sets aside to cover losses from mortgages.
The announcement came with the release of results for the three months to the end of September.
Net profit came in at $5.7bn (£3.5bn), up 33% from $4.3bn in the same period last year.
The bank set aside $1.8bn to cover potential loan losses, down from $2.4bn a year ago.
"Importantly, we believe the housing market has turned the corner," Mr Dimon said in a statement.
But he warned that: "We also expect to see high default related-expense for a while longer."
The collapse of the US housing market sparked the banking crisis that led to the global economic downturn.
JP Morgan said it had made "a modest loss" in the quarter from what is left of the portfolio that has lost it an estimated $5.8bn this year.
It said it expected to lose another $300m by the end of the year.
The shares fell sharply when the bank announced the trading losses in May, but have now almost completely recovered.
Earlier in the week, Mr Dimon told an audience in Washington that he should have stopped the trades by the so-called London Whale.
"We made a stupid error," he said.
"I should have caught it... I didn't."
The bank has so far declined to comment on a report in Thursday's New York Times, which said that federal authorities were using taped telephone conversations, notes from staff meetings, instant messages and emails to build criminal cases against four people who worked for the London team.