THE losses racked up by disastrous trades at the London office of America’s biggest bank nearly trebled to £3.7bn, it has admitted.

JP Morgan Chase said a series of botched bets designed to hedge against other investments had created losses of £4bn over the first half of 2012 – much higher than its previous estimate of £1.3bn.

The bank has revealed that three senior traders associated with the losses – believed to be one known as The London Whale and two other senior managers in London – have followed chief investment officer Ina Drew out the door.

The trades had accounted for losses of £905.1m in the first quarter and £2.8bn in the second quarter, the bank said. They contributed to a £258.6m fall in second quarter net income to £3.2bn at the bank.

And the bank revised down its earnings for the first quarter by £296.8m amid claims that some of its traders may have been trying to hide the full extent of the losses.

The London Whale has been widely reported to be French-born Bruno Iksil, who gained his nickname because of the size of the positions he took.

He was understood to be one of the best-paid traders in the City and commuted to London from Paris on a weekly basis. Insiders at JP Morgan Chase have stressed that he is not a rogue trader, but one of a team whose strategy went wrong.

The trading losses are an embarrassment for the bank, which came through the 2008 financial crisis in much better health than its peers, steering clear of risky investments that hurt many others.

Chief executive Jamie Dimon had originally dismissed concerns about the bank’s trading as a “tempest in a teapot”. But he said yesterday that the episode had “shaken our company to the core”, adding: “We shot ourselves in the foot.”

The bank’s shares have lost about 15% of their market value since the loss was revealed.

However, its shares rose about 3% yesterday after its results came in better than the City had feared, triggering a rally for banking stocks in the US.