WASHINGTON, Oct 12: Jamie Dimon, JPMorgan Chase & Co Inc’s hard-charging chief executive, looked a bit more vulnerable on Friday after the bank took a $7.2 billion hit from litigation expenses and posted its first quarterly loss since 2004.

The loss is a blow to Dimon, who has long used the bank’s steady profit as a shield to ward off critics of its mounting regulatory and legal issues.

The bank for the first time said it has stockpiled reserves of $23bn for expected settlements and other legal expenses.

In unusually humble language for a CEO once lionised on Wall Street and in Washington, Dimon said that the first loss under his leadership was “very painful for me personally.”

JPMorgan reported a loss of $380 million, or 17 cents per share, for the third quarter. A year earlier it posted a profit of $5.71bn, or $1.40 a share.

Dimon earned widespread praise as a risk manager for avoiding most of the mortgage-related losses that hobbled rivals during the financial crisis. But he was less adept at anticipating legal expenses.

The third-quarter legal hit includes money set aside for future settlements. Dimon cautioned that these expenses will likely be elevated for the next year or two.

“I wish we could reduce the uncertainty for investors, but we can’t,” he told reporters in a conference call.

Later, in a conference call with investors, he said it is “very hard to fight with your regulators and the federal government.”

Even putting litigation aside, revenue fell and other results were lukewarm. Weak fixed-income markets squeezed revenue at JPMorgan’s investment bank, off 2 per cent from a year ago and down 17pc from the second quarter, reflecting the tough environment for bond-trading at all Wall Street banks.

“Hit from all sides”

JPMorgan executives have long been quick to point out the bank’s profitability when investors bring up its troubles. The bank posted record profits last year, even as bad derivatives bets known as the “London whale” trades resulted in $6bn of losses.

But the third-quarter loss underscores how legal problems threaten the profitability of a bank that has long boasted of a “fortress” balance sheet.

Dimon “has become a little bit less critical, a little bit less vocal, a little bit more humble,” said Shannon Stemm, a stock analyst at brokerage Edward Jones. “He used to run the bank that really stood out for weathering the crisis better than others.”

The bank’s legal issues are legion. JPMorgan faces more than a dozen probes globally, including whether it fraudulently sold US mortgage securities and whether it improperly fixed certain benchmark borrowing rates.

The Securities and Exchange Commission is investigating whether the bank violated anti-bribery laws in hiring sons and daughters of executives of Chinese state-owned companies.

The Justice Department is looking into whether bank employees obstructed justice in a power market manipulation probe by the Federal Energy Regulatory Commission that the bank settled in July for $410m. JPMorgan neither admitted nor denied violations.—Reuters