Write-down, job cuts loom at JPMorgan

JPMorgan Chase & Co. said Thursday that it was cutting jobs in its fixed-income business as investors braced for a multibillion-dollar write-down next week of the bank’s high-risk loans and other assets.

The No. 3 U.S. bank said the cuts included positions in its “leveraged finance” operation, which markets loans taken out to finance corporate takeovers by private equity firms.

“We are making modest staff reductions in areas where we expect lower volumes going forward,” JPMorgan spokesman Brian Marchiony said.

The recently ended buyout boom kept Wall Street’s leveraged finance desks busy. But the credit crunch that hit this summer spooked debt investors and left banks with more than $350 billion in loans stuck on their balance sheets.

No senior executives are expected to lose their jobs in the cuts, unlike what has happened at rival firms such as Bear Stearns Cos. and Merrill Lynch & Co.

Meanwhile, at rival Citigroup, the co-head of investment banking with responsibility for capital markets and trading is leaving the company, the Wall Street Journal reported.

The executive, Thomas Maheras, had been considered a potential successor to Chief Executive Charles Prince.

JPMorgan is expected to post lower profit when it releases third-quarter results Wednesday.

Merrill Lynch & Co. shocked investors last week when it said it would write down $5.5 billion in assets for the third quarter and report a loss. Merrill also ousted its global head of fixed income, currencies and commodities.