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J.P. Morgan To Cut
4,000 Bankers - Report
TheStreet.com
By TSC Staff
10-5-2


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.
 
The jobs will be cut in M&A, equity and debt underwriting, and corporate lending, sources told Bloomberg.
 
 The firings are expected around Oct. 16, when the bank is scheduled to report third-quarter earnings, Bloomberg reported.
 
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.
 
"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."
 
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.
 
Bank officials blamed their misjudgment of the sector's fortunes for a huge $1 billion increase in nonperforming loans during the quarter.
 
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.
 
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.
 
http://www.thestreet.com/_yahoo/stocks/brokerages/10046141.html





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