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... but JP Morgan could lose $3bn, warn analysts

JP MORGAN Chase has estimated its revenue could fall as much as $3bn (&pound;.18bn) next year if, as a result of legislation, most of its derivative transactions are forced onto an exchange, Sanford C. Bernstein analysts said yesterday. <br />The bank could take an earnings hit of 13 cents to 20 cents per share in 2010 if proposed derivatives legislation becomes law, the analysts estimated after speaking on Tuesday with Steve Black, executive chairman of JP Morgan&rsquo;s investment bank.<br /><br />The calculations are based on the bank&rsquo;s estimate of a worst-case scenario that sees additional regulation for derivatives and the bulk of its privately traded derivatives contracts moving to an exchange.<br /><br />Bernstein&rsquo;s current estimate for JP Morgan&rsquo;s 2010 earnings is $3.20 per share.<br /><br />The US bank has reported record revenue from fixed income, commodities and currencies this year but believes such results will be difficult to repeat in 2010, the analysts said. <br /><br />They added the fourth-quarter slowdown in trading volumes may be worse than usual this year as investors&nbsp; protect gains after a volatile year.