JP Morgan Chase & Co, the USA’s biggest commercial bank, has recently announced a decision to sell out its commodity business. The bank is planning to sell it for $3.3bn. For comparison sake, the current annual net income is $750 million.
The biggest part of the business is represented by the department engaged in trading crude oil. Its estimated cost is around $1.7bn. At the same time, the department that trades natural gas costs around $800 million. The one trading metals costs around $500 million.
At this point, over 20 companies have already show interest in the assets put for sale. By the end of the month, JP Morgan Chase & Co will get their offers to consider them thoroughly and make the final decision. The bank is currently considering either a total sellout or a partial sellout.
JP Morgan had to make such a decision since the US regulators are getting increasingly interested in the bank’s activity in the commodity sector and is afraid that possible investigation may undermine its commodity business, thereby diminishing the capitalization and value of the related departments.
This is not the first US financial institution that has decided to get rid of some of its assets. JP Morgan Chase & Co is currently see its stock declining. The chart below, courtesy of Masterforex-V Academy, confirms that:
