JPMorgan’s Payment Network - Does Bitcoin Have a Challenger?

JPMorgan Chase (JPM), the biggest bank in the US by asset size, has filed an application for the renewal of its intellectual property claims that it first made in 1999. The news has led to speculation that the bank is planning to come up with its own alternative to bitcoin and possibly capitalize on the untapped potential of digital currencies.

However, a source close to the matter has denied these rumors and said that the bank has no intention of coming up with such an alternative.

The patent renewal application was filed in August with the US Patent and Trade Office. According to a document on the Patent Office’s website, the JPMorgan request is for the renewal of a claim originally filed in 1999 and also includes a “method and system for conducting financial transactions over a payment network.”

JPMorgan has so far refused to make any official comment on the matter but similarities do exist between JP Morgan’s payment system and bitcoin.

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JPMorgan’s 3Q Earnings - Moregains In The Future

The company reported a loss of $380 million in its 3QFY13 results, announced on October 11. This translated into a per share loss of $0.17. The bank reported losses primarily because it has allocated $9.2 billion (pretax) for litigation risks. Core earnings per share for the quarter were reported at $1.42 compared to consensus EPS estimate of $1.30, excluding abnormal items.
Consumer and Community Banking revenues were down due to lower net interest margins on deposits and lower mortgage fees and related income. However, net income for the segment saw growth because of lower provisioning for credit losses.
Corporate and Investment Banking revenues declined 2% year-over-year (YoY). But if debit valuation adjustments on structured notes and derivative liabilities are excluded, revenues essentially stayed flat. However, lower non-interest expenses, primarily due to lower compensation expense, more than offset the overall decline in revenues.
Commercial Banking revenues remained flat, but earnings declined 4% due to higher non-interest expenses. Non-interest expenses rose because of an increase in the number of employees bumped up total compensation expenses.
Net revenues from the Asset Management segment increased because of rising interest and non-interest revenues. Non-interest revenues grew as the demand for JPMorgan’s asset management portfolio services increased. Revenues from interest rates grew because of higher loan and deposit balances. Even though revenues increased 12%, earnings grew by just 7%. This was because of higher employee compensation expenses due to an increase in the number of employees and performance related bonuses.
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JPMorgan’s Shares Go Up Despite Huge Legal Payout

For the past few years, JPMorgan (JPM) has faced an onslaught of legal charges. The cases it faces range from illegal hiring practices in China to the sale of misrepresented mortgage-backed securities (MBS) before the financial crisis of 2008. Keeping in mind the disregard of rules and regulations that the nation’s biggest banks have shown, regulators seem to have decided to make an example out of JPMorgan.

Last week on Tuesday, the Department of Justice (DoJ) slapped JPMorgan with a settlement deal worth $13 billion for selling MBS without adequately disclosing the risks. The settlement is worth almost half the annual profits made by JPMorgan and is the largest settlement amount recorded for a single corporation. The deal includes last month’s $4 billion settlement made with the Federal Housing Finance Agency (FHFA) for the securities JPMorgan had sold to Fannie Mae and Freddie Mac.

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JPMorgan’s Payment Network - Does Bitcoin Have a Challenger?

JPMorgan Chase (JPM), the biggest bank in the US by asset size, has filed an application for the renewal of its intellectual property claims that it first made in 1999. The news has led to speculation that the bank is planning to come up with its own alternative to bitcoin and possibly capitalize on the untapped potential of digital currencies.

However, a source close to the matter has denied these rumors and said that the bank has no intention of coming up with such an alternative.

The patent renewal application was filed in August with the US Patent and Trade Office. According to a document on the Patent Office’s website, the JPMorgan request is for the renewal of a claim originally filed in 1999 and also includes a “method and system for conducting financial transactions over a payment network.”

JPMorgan has so far refused to make any official comment on the matter but similarities do exist between JP Morgan’s payment system and bitcoin.

Read More : JPM

JPMorgan Settles Madoff Case for $2.6 Billion

JPMorgan Chase (JPM) agreed yesterday to settle the $17.3 billion Madoff case, and the bank will now pay $1.7 billion to settle the reporting violations. JPMorgan also will pay $350 million to settle a related case by the Office of the Comptroller of the Currency and $543 million to resolve US Bankruptcy Court actions by the trustee seeking Madoff assets on behalf of burned investors.

The $2.6 billion settlement involves the largest ever payment made by a bank in a case involving money laundering violations.

The news caused the stock price to drop 1.15% to $58.32.

This deal comes as part of the larger probe by federal regulators in an attempt to hold big banks accountable for ignoring red flags related to fraudulent activities. HSBC Holdings (HSBC) faced similar charges in 2012, which saw it pay $1.9 billion for failing to report suspicious money transfers through its branches made by Libyan, Iranian, and Mexican drug cartels.

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JPMorgan Hires Former IMF Asia Chief to Lead Regional Regulatory Strategy

JPMorgan Chase (JPM) has hired Anoop Singh, former director of the International Monetary Fund’s (IMF) Asia-Pacific region, to head the bank’s regional regulatory strategy division. Singh is to begin working for the bank in February, out of the bank’s Hong Kong office. He will report to Tim Ryan, global head of regulatory strategy, and Andrew Butcher, chief administrative officer of the Asia-Pacific region.

This newly created position comes on the backdrop of growing global scrutiny over practices followed by big banks. JPMorgan is no stranger to such probes – the bank forked over $30 billion last year in the form of legal costs, with the settlement of at least eight big lawsuits still remaining.

One of these pending lawsuits is regarding the bank’s hiring practices in China. At the moment, US regulators are investigating whether the bank hired children of prominent personalities and government officials to win businesses, which is a violation of the US Foreign Corrupt Practices Act of 1977. This act bars any US-based company from procuring businesses by deceitful means such as giving money or other valuables to foreign officials.

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JPMorgan Stock a Buy Amid Improving Outlook

J.P. Morgan didn't deliver what anyone would consider a great fourth-quarter. Yet there wasn't too much wrong with it either.

Early Tuesday, the banking giant said earnings fell 7.3%, hurt by legal costs and weaker investment banking revenue.

JPMorgan (ticker: JPM) earned $5.28 billion, or $1.30 a share compared to $5.69 billion, or $1.39 a share during the same period last year. Excluding special items, earnings totaled $1.40 a share. Revenue dropped 1.1% to $24.11 billion.

Still, J.P. Morgan topped Street estimates of $1.35 a share in earnings and revenue of $23.67 billion.

The Street's response was muted. On an up day for stocks, JPMorgan edged up 0.1% to $57.76 in afternoon trading after having earlier climbed as high as $58.58.

The results close the book on a challenging year for JPMorgan and its besieged CEO Jamie Dimon. However, even with its tangle of troubles, JPMorgan remains an earnings machine that can drive attractive returns.

And at 9.9 times forward earnings and 1.1 times book value, the price is right.

Robert Ewing, co-head of U.S. Equities at Putnam Investments, told Barron's in an interview published Saturday (see "Finding Value in JPMorgan, BofA and Shell," Jan. 11) that JPMorgan is one of the cheapest of the big banks. "The probabilities are quite high that the negatives have peaked and will slowly recede, and the franchise is performing better than all of the other big banks," he said.

Granted, JPMorgan remains a big target for regulators at a time when the financial industry is facing heightened scrutiny. In 2013, the company agreed to pay some $20 billion in legal settlements, with $850 million in the fourth quarter stemming from its failure to report suspicions of fraud by Ponzi-schemer Bernard Madoff.

Dimon, who himself is under attack from critics, told reporters on a conference call that some probes are only just starting.

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