JPMorgan’s Equity Traders Took a $143 Million Loss on a Single Client

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JPMorgan's 4Q Fixed-Income Trading Revenue Falls 34%

JPMorgan Chase & Co.’s equities business took a big hit from Steinhoff International Holdings NV last quarter.

The bank recognized a $143 million mark-to-market loss on a margin loan to a single customer in its stock-trading unit, the New York-based firm said Friday in a statement. Chief Financial Officer Marianne Lake confirmed on a conference call with reporters that the writedown was tied to Steinhoff, the South African retailer engulfed in an accounting scandal.

Steinhoff announced on Dec. 5 that it had uncovered accounting irregularities. The disclosure prompted a plunge in the share price of the Frankfurt- and Johannesburg-listed company, along with the resignation of Chief Executive Officer Markus Jooste and Chairman Christo Wiese. Steinhoff last week said it’s seeking “significant near-term liquidity” for some of its business units.

Read more: A Quicktake Q&A on Steinhoff issues

Other banks will probably also have large losses tied to Steinhoff, though rivals may report the declining value of loans through higher credit provisions rather than a markdown like JPMorgan did, Lake said.

The loan loss turned a potential 12 percent jump in fourth-quarter equities revenue from a year earlier to little changed.

— With assistance by Trista Kelley, Luca Casiraghi, and Viren Vaghela

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