JPMorgan Chase & Co has made enough progress containing its $5.8 billion of derivatives losses and tightening its risk controls that the outlook for its credit rating has improved to stable from negative, Fitch Ratings said on Wednesday.
JPMorgan "has not suffered meaningful damage to its franchise from the losses in its Chief Investment Office," the rating agency said. It was referring to the business unit of the bank where a trader became known as the "London Whale" for establishing outsized positions in credit derivatives.
Fitch had downgraded JPMorgan one notch to A+ and put the rating on "Watch Negative" the day after JPMorgan shocked Wall Street on May 10 by announcing it had lost billions of dollars on trades that CEO Jamie Dimon called "stupid."
The losses have set off investigations by U.S. criminal prosecutors and by agencies in multiple countries. JPMorgan conducted its own investigation and fired and reassigned staff.
Fitch said it changed JPMorgan's outlook to stable as part of a periodic review of 12 global banks. Fitch changed no other ratings or outlooks for the other banks in the group.
Fitch outlooks generally apply for the next 12 months.
Fitch left in place the A+ rating for JPMorgan.
JPMorgan is scheduled to report third-quarter results on Friday morning and give its own update of the London Whale losses.
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