- J.P. Morgan Chase will lay off 4,000 of its 20,000 investment
bankers this month, following a steep decline in trading revenue and an
increase in loan losses, Bloomberg.com reported Friday.
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- The jobs will be cut in M&A, equity and debt underwriting,
and corporate lending, sources told Bloomberg.
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- The firings are expected around Oct. 16, when the
bank is scheduled to report third-quarter earnings, Bloomberg reported.
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- Last month, the bank, the second-largest in the U.S.,
warned that third-quarter earnings would be much worse than expected because
of the rising loan losses and weak trading revenue.
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- "The company is messed up," Sean Egan, president
of Egan-Jones Ratings, a small corporate credit-rating agency, told TheStreet.com
in September. "They've had a lion's share of these (loan) blowups.
They'd be insane not to change some people who have been involved in making
credit decisions."
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- The bank's top management has admitted that it underestimated
weakness in the telecom industry -- a sector J.P. Morgan has lent more
money to than any other big bank.
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- Bank officials blamed their misjudgment of the sector's
fortunes for a huge $1 billion increase in nonperforming loans during the
quarter.
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- Reilly Tierney, a bank analyst with Fox-Pitt Kelton,
who owns J.P. Morgan shares, says the bank's management hasn't shown that
it has any turnaround strategy, other than waiting for an economic recovery
to take hold.
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- Shares of J.P. Morgan Chase fell $1.08 Friday to close
at $16.54 in New York Stock Exchange trading, a seven-year low.
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- http://www.thestreet.com/_yahoo/stocks/brokerages/10046141.html
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