JPMorgan US$143m loan loss is said to be tied to Steinhoff

A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in Manhattan, New York, November 13, 2017. — Reuters pic
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in Manhattan, New York, November 13, 2017. — Reuters pic

NEW YORK, Jan 12 — JPMorgan Chase & Co’s equities business took a big hit from Steinhoff International Holdings NV last quarter.

The bank recognised a US$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 today in a statement. The bank didn’t identify the client or say what caused the loss. The write-down was tied to Steinhoff, the South African retailer engulfed in an accounting scandal, according to a person briefed on the matter.

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.

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

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