J.P. Morgan Chase has revealed that a trading related loan to an private customer resulted inward a huge loss for the banking company during Q4. In its study, the investment bank disclosed that results for equity markets revenue included “the touch on of a score-to-market place loss of $143 one thousand thousand on a margin loan to a unmarried customer.” If it had non been for this huge single loss, J.P. Morgan’second equity markets revenue would have recorded a 12 per cent increment for the quaternary quarter.
J.P. Morgan chose not to give away the private client’second bring up, but did acknowledge the liability came from “a syndicated margin loan facility to related parties” of Steinhoff International Holdings NV. Steinhoff is a South African based retailer whose percentage toll suffered heavy losses at the finish of 2017, later on the company became embroiled in an accounting scandal.
In December, Steinhoff confirmed publicly that accounting malpractice had been discovered inside the company. The resignation of Chief Executive Officer Markus Jooste together with Chairperson Christo Wiese quickly followed. The Financial Times so reported that the identity of the specific private concerned alongside the loan was Christo Wiese.
J.P. Morgan too said that it expected other financial firms to confirm they were as well exposed to the same detail customer, in addition to indeed it is being reported that the Goldman Sachs Group volition expose a loss related to Steinhoff. In 2015, Goldman was 1 of a group of lenders that facilitated a loan to the investment vehicles of Christo Wiese, Steinhoff’s old chairman, conditional on the vehicles pledge of 628 one thousand thousand Steinhoff shares for collateral.
In add-on to Goldman Sachs and J.P. Morgan, it is believed that Citigroup, HSBC, Bank of America and Nomura Holdings too formed role of the margin loan arrangement to Wiese’sec investment vehicles. All six of these large fiscal institutions will probable incur huge liabilities as a issue of participating inwards this loan to Wiese, a loan that was most in all probability secured through the function of misleading financial statements and accounts from Steinhoff International.