August crash impacts JPMorgan's trading revenues

Falling in lines of Bank of America (BoA) and Citigroup Inc, the US banking major JPMogran Chase & Co has also indicated the possible drop in the revenues for the third quarter ending September. The high volatile trading during August shrunk the trading volume of the investment banking arm of JPMorgan Chase. Since the bank's strategy of not to lose money restricted the bank from speculative trading during the August crash. JPMorgan Chase also sees China's economic slowdown as a speed breaker, but not a devastating thing if the world's second largest economy is growing at five percent. JPMorgan has decided to implement an expansion plan for strengthening retail operations.

The over 10 percent crash in the US stock markets during August had taken a toll on the performance of investment banks. Bank of America and Citigroup have already announced their projections of over five percent fall in their revenues for the third quarter as trading volumes tumble.

Terming about its performance for the third quarter as same as everybody else, Jamie Dimon, Chief Executive Officer, JPMorgan Chase & Co, said: "The volume was very slow, while the results weren't really great. I liked the fact that we could trade through those days and not lose any money."

Dimon termed the latest slowdown in China's economy as 'a speed bump' and the rate of growth even if it's at five percent also. "it wouldn't be a devastating thing for the world," he said.

Dimon has also cautioned that treasuries prices become highly volatile if the interest rate is increased.The interest rate is at near zero level for a long time. Many fund managers don't have experience in handling portfolios in typical conditions of rising interest rate.

When the US Fed hikes interest rate, people change their mind and shift focus on treasuries. As a result, the 10-year treasuries will become more violent and more volatile beyond projections, said Dimon.

JPMorgan Chase & Co will open 100 branches in the US including adding a new city to its network in next two years. The setting up new branches is as part of bank's strengthening retail operations in the US. However, the bank didn't name the city, which will be added to its network. Since JPMorgan Chase has over 10 percent of insured deposits, the bank is not allowed to acquire other banks.

This puts JPMorgan Chase in a situation that it has to expand by establishing its own branches though it's expensive. JPMorgan is planning to make it big in the capital market business. This is aimed at taking advantage of the weakness of European banks.