The bank first disclosed losses from the wagers in May, almost a month after Dimon dismissed initial news reports on the wagers as a “tempest in a teapot.” Dimon, 56, whose pay was cut 50 percent this year to $11.5 million, said last month that the company is almost done booking losses from the trades.
“JPMorgan sustained a black eye, as did Jamie Dimon,” Cassidy said. Now “the market has given its verdict: the London Whale was a trading problem that was blown out of proportion and now it’s been put back into perspective.”
Deutsche Bank AG analysts led by Matt O’Connor upgraded JPMorgan to buy from hold on Jan. 25, citing a 30 percent underperformance in the shares compared with global banks since early August. JPMorgan, which posted a third straight year of record profit with $21.3 billion for 2012, may see annual operating expenses drop as much as $5 billion as costs to service mortgages fall, the analysts said in a note to clients.
Wells Fargo’s mortgage revenue, which helped the lender report record profit of $18.9 billion last year, may decline 18 percent this year to $10 billion from 2012 once loan repurchases are discounted, Richard Staite, an analyst at Atlantic Equities LLP, wrote in a Jan. 29 research note.