JP Morgan Chase & Co. and Bank of America Corp. were among six biggest US banks that had piled up more than USD100 billion in legal costs. This was after the financial crisis wherein a total of USD103 billion was paid, more than all dividends given to shareholders in the last five years.
Data compiled by Bloomberg showed that the total amount for legal bills included lawyers' fees and litigation costs. It also included settling claims regarding foreclosures and shoddy mortgages. The total amount was equivalent to spending USD51 million a day. This was more than enough to erase all the money that the bank earned for 2012.
The hefty legal bills had vexed bankers who had been counting on expense cuts. This was to make up for sluggish growth on revenue and make room for bigger payouts. Since January 2012, there had been about 40% increase in legal and litigation outlays. Banks had warned that the tally might surge after investors and prosecutors pressed new claims.
Join the Conversation