JPMorgan makes gain of $250 million amid turmoil for FX brokers and banks following Swiss franc’s rapid appreciation


The entirety of the damage to FX companies and banks as a result of exposure to negative client account balances following the Swiss National Bank’s removal of the 1.20 floor on the Swiss Franc is still being counted, however according to a report by the Wall Street Journal, one large financial institution has bucked the general trend.

JPMorgan Chase & Co. (NYSE:JPM) has, according to the report, experienced quite the opposite.

The report states that the financial giant, whose currency trading business is part of the vast interbank FX sector which along with its counterparts UBS, Citi, Barclays, HSBC and Royal Bank of Scotland handles a substantial proportion of global FX order flow, actually made a gain of between $250 million and $300 million after the Swiss Bank’s decision caused rapid acceleration in the value of the Swiss franc against other major currencies, notably the euro.

By contrast to this figure, other banks which have large FX trading desks experienced losses, with Citigroup Inc (NYSE:C) having recorded approximately $150 million in losses due to the franc’s appreciation, with Deutsche Bank and Barclays PLC (LON:BARC) also having counted a high cost.

The current share prices of each institution reflect this, with JPMorgan’s share prices relatively steady, with just a $0.34 decrease over yesterday’s price, whereas Barclays stock down £2.60 at close of business today to £236.85.

When viewing the bank’s share prices since January 15, a steady recovery has been evident, thus if the firm’s claims that it has made such gains are indeed correct, investor confidence from a shareholder and customer perspective could bolster the value of the stock further.

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Chart courtesy of Google Finance

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JPMorgan makes gain of $250 million amid turmoil for FX brokers and banks following Swiss franc's rapid appreciation

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