JP Morgan calls halt to $15bn share buyback to focus on Basel
JP MORGAN has called a halt to its $15bn (£9.5bn) share buyback programme following $2bn in trading losses. The bank said it wants to instead prioritise getting its capital up to the levels required by the Basel III rules.
Chief executive Jamie Dimon told an investor conference yesterday that the bank wants to “box this thing first” by focusing on building capital. It will continue with plans to pay a dividend but has put the buyback on hold after completing just $1.3bn of the programme.
Its capital plans received a knock recently due to a hedging strategy that has lost the bank at least $2bn, which could rise by a billion or so.
It is not clear if the bank’s halt to the buyback came after a prod from the Federal Reserve or if it is pre-empting any regulatory move. Dimon also told analysts that the loss is not in danger of spiralling out of control and becoming an existential threat. “There’s no outcome that will be a disaster for this company,” he said.
It has also emerged that Irvin Goldman, the bank’s head of risk at its chief investment office, which lost the money, had previously been fined by US regulators and fired for presiding over trading losses at Cantor Fitzgerald in 2007.