JPMorgan to close prop desk, lay off traders: source

Business Materials 5 November 2008 01:02 (UTC +04:00)

JPMorgan Chase & Co is eliminating a group that traded the bank's own money in areas ranging from stocks to bonds to commodities, and will likely lay off some traders, a person familiar with the matter said.

JPMorgan, the nation's largest bank and one of the strongest in the battered financial sector, said in an internal note on Monday that the group's traders will be merged with traders in other areas that work with clients, Reuters reported.

Banks have been trimming trading desks that invest their firms' money after posting billions of dollars in write-downs and losses this year in such areas as trading.

The Financial Times reported on Monday that one of Goldman Sachs' flagship hedge funds had lost close to $1 billion this year.

JPMorgan declined comment. The internal note said the move was meant to improve efficiency.

"We eliminate duplication that exists within the businesses today and create efficiencies," according to the note, which was obtained by Reuters.

JPMorgan has stood out as one of the banks that has best survived the credit crisis, but its third-quarter profit fell 84 percent from a year earlier. This was largely on the back of higher provisions for credit losses as well as charges related to the acquisition of Seattle-based thrift Washington Mutual Inc.

JPMorgan shares were up 93 cents, or 2.28 percent, at $41.66 in afternoon trading on the New York Stock Exchange.