New York: JP Morgan Chase, the largest bank in the US, acknowledged Thursday trading losses of USD 2 billion for the past six weeks.
The losses came from derivatives bets which have gone wrong in the bank's Chief Investment Office, a unit that manages risk for the New York-based bank, reported Xinhua.
The fallout spread across much of the banking sector, with shares of some of Wall Street's top names declining on Friday. Citigroup dropped 4.2%, Goldman Sachs fell 3.9% and Bank of America slipped 1.9%.
After factoring in other securities gains, JP Morgan raised its estimates for Chief Investment Office's net losses to USD 800 million in the second quarter. The unit was previously expected to gain USD 200 million.
Jamie Dimon, chief executive of JP Morgan, told reporters after US markets closed that the losses were caused by "errors, sloppiness and bad judgement".
"This was a unique thing we did," Dimon said. "Obviously it had a lot of problems. It was a bad strategy. It became more complex, it was poorly managed."
The bank's stocks plunged nearly 7 percent in after-hours trading after the losses were announced.
JPMorgan was by far the worst performer, however, falling 9.3% on a day when some 212 million of its shares traded, the most volume in its history.
With Agencies Input
First Published: Friday, May 11, 2012, 12:23