You can now read 5 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

Rising legal costs push JPMorgan to rare loss

JPMorgan Chase set aside $9.2 billion in the third quarter to cover a string of litigation stemming from the housing crisis and the bank’s ‘‘London Whale’’ trading debacle.

Spencer Platt/Getty Images

JPMorgan Chase set aside $9.2 billion in the third quarter to cover a string of litigation stemming from the housing crisis and the bank’s ‘‘London Whale’’ trading debacle.

NEW YORK — Mounting legal costs pushed JPMorgan Chase to a rare loss in the third quarter.

The largest US bank by assets set aside $9.2 billion in the quarter to cover a string of litigation stemming from the housing crisis and the bank’s ‘‘London Whale’’ trading debacle. The loss was the bank’s first in nearly a decade.

Continue reading below

JPMorgan said it has placed a total of $23 billion in reserve to cover potential legal costs, including the $9.2 billion.

In a conference call with reporters, chief executive Jamie Dimon called the costs ‘‘painful,’’ but said they reflected ‘‘the reality we have to deal with.’’

While JPMorgan emerged from the financial crisis and the Great Recession as one of the strongest US banks, it has been dogged by legal problems in recent years.

Last month, it agreed to pay $920 million and admitted that it failed to oversee trading that led to a huge $6 billion loss last year, an episode that came to be known as the London Whale, referring to the location of the trader who made those oversized bets.

The bank said in August that it is facing a federal criminal probe focused on mortgage-backed securities sold before the financial crisis. Federal energy regulators, meanwhile, are investigating some of the company’s bidding practices in energy markets.

The bank is also said to be discussing an $11 billion national settlement with the Department of Justice over mortgage-backed securities. The securities lost value after a bubble in the housing market burst, helping to bring on the financial crisis.

JPMorgan lost $380 million in the third quarter, compared with net income of $5.7 billion a year earlier. On a per-share basis, it lost 17 cents, versus earnings of $1.40 a year earlier.

The bank was helped by credit card sales and more deposits at its consumer banking unit. Net income at JPMorgan’s investment banking division rose as expenses fell, and it reduced its reserves for losses on loans.

The overall quarterly loss was the bank’s first since the second quarter of 2004, before the global financial crisis and the start of Dimon’s tenure as chief executive in December 2005.

Dimon declined to say when the bank would finally put its legal worries behind it, but said he wasn’t expecting further losses of this magnitude.

Loading comments...
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com
Already a subscriber?
Your city. Your stories. Your Globe.
Yours FREE for two weeks.
Enjoy free unlimited access to Globe.com for the next two weeks.
Limited time only - No credit card required!
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.
Thanks & Welcome to Globe.com
You now have unlimited access for the next two weeks.
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.