NEW YORK — JPMorgan Chase on Thursday formally revised its first-quarter financial results to show a lower profit, after deciding that traders at its main investment arm had overstated the value of certain derivatives.
The reduction followed the bank’s internal investigation into the nearly $6 billion in trading losses revealed in recent months.
JPMorgan reiterated that it had discovered that some traders may have tried to conceal the size of losses from a soured bet. The “London Whale” trades involved complicated hedging strategies intended to reduce the bank’s risk, but they actually increased it when they backfired.
In a regulatory filing, the New York bank said the probe found information that “suggested that certain individuals may have been seeking to avoid showing the full amount of the losses being incurred.”
As it revealed last month, the bank now says that it earned $4.92 billion for the quarter ended March 31. That’s about $459 million less than the $5.38 billion originally reported.
On a per-share basis, the results came to $1.19, compared with the $1.31 first reported.
JPMorgan’s regulators, the Federal Reserve and the Office of the Comptroller of the Currency, told the bank to restate a measure of capital strength that it had previously published for the first and second quarters. In its filing, the bank revised the measure downward for the two quarters to reflect additional risk from the trading loss.
The bank also admitted to a “material weakness” in its internal controls. It said steps have been taken to address the problems, but noted that management is continuing an internal review of the matter.
