JP Morgan Chase & Co today reported a 7.3% drop in quarterly profit after the bank by assets paid penalties to the US government for not reporting suspicions of fraud by Ponzi-scheming client Bernie Madoff.

Net income fell to $5.28 billion, or $1.30 per share, in the fourth quarter from $5.69 billion, or $1.39 per share in the same quarter of 2012, the bank said.

The latest results took into account gains from the sale of Visa shares and One Chase Manhattan Plaza and legal expenses related to the Madoff settlements.

JPMorgan agreed last week to pay $2.6 billion to settle government and private claims over its handling of Madoff accounts.

It estimated then that this would subtract $850m from fourth quarter earnings to cover expenses that it had not accounted for in reserves. 

The bank agreed to pay nearly $20 billion in 2013 to settle assorted legal claims.

"It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward," the bank's chairman and chief executive Jamie Dimon said in a statement.