Tomahawk, WI 9/18/2013 (BasicsMedia) –  JP Morgan Chase & Co (NYSE:JPM) is the largest U.S bank regardless of which factors you use to compare it with others. Lately, the bank appears to be coming out of one legal and regulatory hurdle to another one. Investors have even started raising concerns as to whether this is a good sign or not. Some investors appear to be quite displeased with these events but the bank’s top executives are stating that they expect the pattern to continue into the next several weeks and months. It is difficult to state with certainty when these hurdles will cease.

What is JPM Doing to Protect Itself?

You don’t grow a bank of JPM’s stature without expecting to go through a period of intense trials on several fronts. The U.S Department of Justice as well as a number of regulators are keenly interested in what is happening in JPM. Its CEO, James Dimon has embarked on a series of meetings with the regulators and Department of Justice officials with the sole intention of helping to normalize relations between the bank and these institutions. The bank is also devoting its resources to ensure that these legal and regulatory setbacks are tackled appropriately and fast.

The bank has a number of control banks, which it is now investing more on in an effort aimed at ensuring that it enjoys success from its many legal and regulatory challenges. These control groups include risk, technology, compliance, finance, legal, audit, control and oversight. JPM has set aside $1 billion to help these control groups achieve their goals regarding success with the legal and regulatory challenges. It has also seen it fit to add some 4,000 personnel into the control groups to equip them for the challenges lying ahead in the coming weeks and months.

JPM Abandoning Its Non-Profitable Businesses

The bank’s CEO has also reiterated the bank’s decision to abandon businesses which are not core to its operations. Some of its businesses which have, therefore, been affected by this edict include selling identity theft protection products and services. JPM has also decided to stop selling credit insurance to its customers. It has recently announced that it will no longer be offering student loan services, which hasn’t been as profitable as the bank envisaged. Soon the bank says it will not be involved in the trading of physical commodities. JPM is quite proactive.

JPM has not had the best of times on the legal front. It recently lost close to $6 billion in the derivates trade, for which two of its former employees have been indicted and facing charges in court. The civil lawsuits which have risen out of this matter will likely cost JPM around $700 million or more to settle. Some of the issues which the relevant authorities are holding JPM to account for include bribery allegations in China, energy trading, mortgage securities which were sold fraudulently. The bank and its employees have to work hard to fix these challenges.

The overwhelming feeling I get from all these, is that JPM is probably going to be spending a lot of time and money tackling issues arising from this intense scrutiny and probe into its activities. I don’t expect to see these issues leading to losses or poor financial performance by JPM though.

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