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JPMorgan Has Bigger Worry Than ‘London Whale’: Bove

JPMorgan has its "London Whale" trading losses behind it, but the question is how much money the bank can from its regular operations, Dick Bove, Rochdale Securities bank analyst, told CNBC’s “Squawk Box” Monday.

The losses could bigger, Bove said “but there’s a chance that you may actually see a profit coming of the residuals from this trade.”

According to Bove, “The core issue should be how money can this company make its operations. And I think in the second half of this year, it’s not going to make much money.”

Bove said the underlying numbers JPMorgan were not all that great in second quarter.

The bank posted second-quarter net income $4.96 billion, or $1.21 a share, compared $5.43 billion, or $1.27 a share a year earlier.

The $4.4 billion trading loss after taxes reduced earnings share by 69 cents in the quarter, the company said. JPMorgan said it cleaned its Chief Investment Office, made the disastrous credit bets, and that any problems were isolated the group.

One trader the Chief Investment Office, Bruno Iksil, took big enough positions in the credit derivatives markets to earn the "The London Whale." Iksil has left the bank, a source said Friday.

"We have put most of this problem us and we can now focus our energy on what we do best," JPMorgan CEO Jamie Dimon said a statement.

From here, Bove expects credit income to down at JPMorgan. “It’s trouble maintaining its non-interest income and expenses are too high,” he added. “I think they’re a buck a share a quarter for the next couple of quarters and that’s terrific.”


Adapted from: CNBC, July 16, 2012.