'JPMorgan Chase' ( ) is one of the oldest
financial services firms in the world. The company, headquartered in
New York City, is one of the leaders in
investment banking, financial services,
asset and
wealth management and
private equity. With assets of $1.4 trillion, JPMorgan Chase is currently the third largest
banking institution in the
United States,
[1] behind
Bank of America and
Citigroup. The
hedge fund unit of JPMorgan Chase is the largest
hedge fund in the
United States with $34 billion in assets as of
2007.
[2] Formed in 2000 with the merger of the
Chase Manhattan Corporation and
J.P. Morgan & Co., the firm serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and governmental clients.
In 2004, the company merged with
Bank One of
Chicago, bringing on board Bank One
CEO Jamie Dimon as president and COO of the merged firm and designating him as
CEO William B. Harrison, Jr.'s future successor. Dimon quickly made his influence felt by embarking on a cost-cutting strategy and placing some former Bank One executives in key ranks at the new company. Dimon became CEO in January 2006, and also became chairman in December 2006.
JPMorgan Chase operates as the brand for the holding company. Chase is used as the brand for credit card services and the bank's retail banking activities in the
United States:
★ Checking
★ Credit Cards
★ Savings
★ CDs
★ Online Banking & Bill Pay
★ Home Equity
★ Mortgages
★ Auto/Vehicle loans
★ Student Loans
★ Business and Commercial Banking
★ Insurance
★ Investments
★ Retirement Planning
JPMorgan & Co. is used as the brand for the bank's:
★ Investment Bank
★
Treasury Services
★
Worldwide Securities Services
★ Private Bank
★ Asset Management
★ One Equity Partners
★ Private Client Services
History
Chemical Banking Corporation
The
New York Chemical Manufacturing Company was founded in 1823 as a maker of various chemicals. In 1824, the company amended its charter to perform banking activities and created the
Chemical Bank of New York. After 1851, the bank was separated from its parent and grew organically and through a series of mergers, most notably with
Corn Exchange Bank in 1954,
Texas Commerce Bank (a large bank in
Texas) in 1986, and
Manufacturer's Hanover Trust Company in 1991 (The first major bank merger "''among equals''.") At many points throughout this history, Chemical Bank was the largest bank in the United States (either in terms of
assets or
deposit market share).
In 1996, the company acquired the
Chase Manhattan Corporation but kept that name. In 2000, the company acquired J.P. Morgan & Co. and changed its name to J.P. Morgan Chase & Co. JPMorgan Chase retains
Chemical Bank's headquarters and stock history.
Chase Manhattan Bank
The
Chase Manhattan Bank was formed upon the 1955 purchase of Chase National Bank (established in 1877) by the
Bank of the Manhattan Company (established in 1799), the company's oldest predecessor institution. Led by
David Rockefeller during the
1970s and the
1980s, Chase Manhattan was one of the largest and most prestigious banking concerns, with leadership positions in syndicated lending, treasury and securities services, credit cards, mortgages, and retail financial services. Weakened by the real estate collapse in the early
1990s, it was acquired by Chemical Bank in 1996.
The Bank of the Manhattan Company was the creation of
Aaron Burr, who transformed The Manhattan Company from a water carrier into a bank.
Bank One Corporation
Bank One Corporation was formed upon the 1998 merger between
Banc One of Ohio and
First Chicago NBD. These two large banking companies had themselves been created through the merger of many banks.
The bank traces its roots to
First Bancgroup of Ohio, founded as a holding company for
City National Bank of Columbus, Ohio and several other banks in that state, all of which were renamed "Bank One" when the holding company was renamed
Banc One Corporation. With the beginning of interstate banking they spread into other states, always renaming acquired banks "Bank One", though for a long time they resisted combining them into one bank. After the NBD merger, adverse financial results led to the departure of CEO
John B. McCoy, whose father and grandfather had headed Banc One and predecessors.
Jamie Dimon, a former key executive of
Citigroup, was brought in to head the company.
J.P. Morgan & Company
In 1895,
Drexel, Morgan & Co. became J.P. Morgan & Co. (see also:
John Pierpont Morgan). It financed the formation of the
United States Steel Corporation, which took over the business of
Andrew Carnegie and others and was the world's first billion-dollar corporation. In 1895, it supplied the United States government with $62 million in
gold to float a bond issue and restore the
treasury surplus of $100 million. In 1892, the company began to finance the
New York, New Haven and Hartford Railroad and led it through a series of acquisitions that made it the dominant railroad transporter in
New England.
Its primary competitor,
Kuhn, Loeb & Co., was a more successful adviser and financier to production companies and J.P. Morgan lost its first place in
market cap and the
league tables. Kuhn, Loeb & Co. would, through a series of mergers and divestitures, eventually become publicly held
Lehman Brothers.
September 16, 1920: a bomb exploded in front of the headquarters of J.P. Morgan Inc. at
23 Wall Street, injuring 400 and killing 38 people.
Built in 1914, 23 Wall Street was known as the "House of Morgan," and for decades the bank's headquarters was the most important address in American finance. At noon, on September 16, 1920, a
terrorist bomb exploded in front of the bank, injuring 400 and killing 38. Shortly before the bomb went off, a warning note was placed in a mailbox at the corner of Cedar Street and Broadway. The warning read: "Remember we will not tolerate any longer. Free the political prisoners or it will be sure death for all of you. American Anarchists Fighters." While theories abound about who was behind the
Wall Street bombing and why they did it, after twenty years investigating the matter, the
FBI rendered the file inactive in 1940 without ever finding the perpetrators.
In August 1914,
Henry P. Davison, a Morgan partner, traveled to the UK and made a deal with the
Bank of England to make J.P. Morgan & Co. the monopoly underwriter of
war bonds for UK and
France. The Bank of England became a "
fiscal agent" of J.P. Morgan & Co. and vice versa. The company also invested in the suppliers of
war equipment to England and France. Thus, the company profited from the financing and buying activities of the two European governments.
In the
1930s, J.P. Morgan & Co. was forced by the
Glass-Steagall Act to choose either commercial banking or investment banking. J.P. Morgan & Co. chose to operate as a
commercial bank, because it was perceived to be more profitable in the post depression era. Faced with this new paradigm shift, many Morgan partners, along with some Drexel partners, sought to begin what is now called
Morgan Stanley. It is a common misconception that the "Morgan" in Morgan Stanley is the last name of John Pierpont Morgan, but, in fact, it is the last name of Henry Morgan, who was a J.P. Morgan partner. J.P. Morgan & Co. incorporated in 1940,
[3] and, in 1959, merged with the
Guaranty Trust Company of New York to form the
Morgan Guaranty Trust Company. Ten years later, it established a
bank holding company called J.P. Morgan & Co. Incorporated as its parent. By the late
1990s, when it was acquired by Chase Manhattan (the new company's name became JPMorgan Chase & Co.). The
Gramm-Leach-Bliley Act repealed the restrictions of Glass-Stegall and allowed Morgan to turn itself into an investment bank, too. Besides investment banking, it also offered
private banking and
private equity services.
In 2006, JPMorgan Chase purchased
Collegiate Funding Services, LLC, and created Chase Education Finance.
On April 7, 2006, JPMorgan Chase announced it would be swapping its corporate trust unit for The Bank of New York Co.'s retail and small business banking network. The swap values The Bank of New York business at $3.1 billion and JPMorgan's trust unit at $2.8 billion and gives Chase access to 338 additional branches and 700,000 new customers in the New York, New Jersey, and Connecticut Tri-State area.
For the first quarter of 2007, JPMorgan Chase posted
net income of $4.9 billion on a record $19.0 billion in revenues.
[4]
JP Morgan Chase stock fraud allegations filed in national court attempt to hold stock advisors responsible for poor investment decisions. JP Morgan Chase stock fraud suits seek to recover the losses suffered by individual and company clients. Groups claiming JP Morgan Chase stock fraud resulted in loss of investments are the University of California and former Enron employees, among others.
[4]
Government subsidies and incentives, post-9/11
BBC News reported that JPMorgan Chase struck a deal to receive large incentives and subsidies from the
City of New York and the
State of New York to ensure that the company does not follow through on threats to leave downtown New York for
Connecticut.
[6] While there are other companies that have received similar incentives to stay in New York's Downtown after
9/11, BBC News reports that this is the largest deal of its kind to date. A quote from the BBC article:
''New York City officials have already paid Goldman Sachs $650m (£330m) to build new offices in Battery Park City. ''[...]'' But the paper says that JP Morgan Chase will receive an even better deal, with tax breaks, discounted electric power and rent subsidies worth $100m from city and state authorities. And it says that rent subsidies will amount to $50m per year for 15 years, or $750m. JP Morgan Chase is a huge, and very profitable company.''
Offices
The J.P. Morgan Chase Tower in Houston
Although Chase Manhattan Bank's headquarters were once located at the
One Chase Manhattan Plaza building in downtown Manhattan, the current world headquarters for JPMorgan Chase & Co. are located at 270
Park Avenue. The bank moved some of its operations to the
JPMorgan Chase Tower (formerly Texas Commerce Bank Tower) in
Houston, Texas, when it purchased
Texas Commerce Bank. Since merging with
Bank One in 2004, retail services (branded as "Chase") are headquartered in Chicago. The Card Services division has its headquarters in
Wilmington, DE. There are also large operations centers in
Brooklyn, NY,
Columbus, OH,
Dallas, TX,
Fort Worth, TX,
Indianapolis, IN,
Newark, DE,
Phoenix, AZ,
Glasgow,
United Kingdom and
Bournemouth,
United Kingdom. The backoffice and Technology operations offices based in
Manila in the
Philippines, and
Mumbai and
Bangalore,
India are currently being aggressively staffed.
JPMorgan Securities, the investment banking arm of JPMorgan, also maintains a number of high-profile offices around the globe, with the largest concentrations in London, Hong Kong, Singapore, and Tokyo. The bulk of North American operations, however, take place in three buildings located within a few blocks of each other on Park Avenue in New York City: the
former Union Carbide Building at 270 Park Avenue, the hub of sales and trading operations, and the
original Chemical Bank building at 277 Park Avenue, where most investment banking activity takes place. Also, their asset and wealth management groups are located at 245 Park Avenue.
Banking subsidiaries
JPMorgan Chase & Co. owns five banking subsidiaries in the United States:
[7]
★ Chase Bank USA, National Association
★ JPMorgan Chase Bank, National Association
★ JPMorgan Chase Bank, Dearborn
★ J.P. Morgan Trust Company, National Association
★ Pier 1 National Bank
Legal proceedings
J. P. Morgan Chase, which helped
underwrite $15.4 billion of WorldCom's bonds, agreed in the middle of March of 2005 to pay $2 billion; that was 46 percent, or $630 million, more than it would have paid had it accepted an investor offer in May of $1.37 billion. J. P. Morgan was the last big lender to settle. Its payment is the second largest in the case, exceeded only by the $2.6 billion accord reached in Q4 2004 by
Citigroup (
[1]).
In March of 2005, 16 of
WorldCom's 17 former underwriters reached settlements with the investors (
[2]).
Major sponsorships
JPMorgan Chase owns the naming rights of several venues in the sports world.
★
Chase Field,
Phoenix, Arizona, -
Arizona Diamondbacks,
MLB. Before the Bank One buyout, it was called Bank One Ballpark (nicknamed the B.O.B.).
Official sponsorships
★
Major League Soccer.
★ Chase Auditorium (Formerly Bank One Auditorium) in Chicago, is the home of the nationally syndicated NPR program, "Wait, Wait, Don't Tell Me."
★ Chase Plaza was known as the Bank One Plaza before the merger in Chicago. This housed the corporate headquarters of Bank One in Chicago but is now the corporate office of JPMorgan Chase in Chicago.
★ The
JPMorgan Chase Corporate Challenge, owned and operated by JPMorgan Chase, is the largest corporate road racing Series in the world with over 200,000 participants in 12 cities in six countries on five continents. It has been held annually since 1977 and the races range in size from 4,000 entrants to more than 60,000.
Notable employees
Business
★
Andrew Crockett - General Manager of the
Bank for International Settlements (1994-2003)
★
Pierre Danon - Chairman of
eircom
★
Dina Dublon - Current member of the Board of Directors at
Microsoft,
Accenture and
PepsiCo and former Executive Vice President and Chief Financial Officer of JPMorgan Chase.
★
Maria Elena Lagomasino - Current member of the Board of Directors at
The Coca-Cola Company and former Chief Executive Officer of JPMorgan Private Bank.
★
Thomas W. Lamont - acting head of J.P. Morgan & Co. on
Black Tuesday
★
Lewis Reford - Canadian political candidate
★
Jan Stenbeck - former owner of
Investment AB Kinnevik
★
Jing Ulrich - Current Chairman of China Equities
Politics and public service
★
William M. Daley - U.S. Secretary of Commerce (1997-2000)
★
Michael Forsyth, Baron Forsyth of Drumlean - Secretary of State for Scotland (1995-97)
★
Thomas S. Gates, Jr. - U.S. Secretary of Defense (1959-61)
★
Rick Lazio - Member of the U.S. House of Representatives (1993-2001)
★
Antony Leung - Financial Secretary of Hong Kong (2001-03)
★
Frederick Ma - Hong Kong Secretary for Financial Services and the Treasury (2002-present)
★
Dwight Morrow - U.S. Senator (1930-31)
★
Margaret Ng - Member of the Hong Kong Legislative Council
★
George P. Shultz - U.S. Secretary of Labor (1969-70), U.S. Secretary of Treasury (1972-74), U.S. Secretary of State (1982-89)
Others
★
Douglas Cliggott - economist
★
Henry P. Davison - philanthropist
★
David Dodd - economist
★
Samuel Gottesman - philanthropist
★
Corliss Lamont - humanist
★
Tarik O'Regan - composer
See also
★
Bank One Corporation
★
The Bank of New York
★
Chase Manhattan Corporation
★
Rockefeller family
★
David Rockefeller
★
John J. McCloy
★
Chemical Banking Corporation
★
Manufacturer's Hanover Trust Company
★
Texas Commerce Bank
★
JPMorgan Chase Tower
Competitors
★
Bear Stearns
★
Citigroup
★
Credit Suisse
★
Deutsche Bank
★
Goldman Sachs
★
Lehman Brothers
★
Macquarie Bank
★
Merrill Lynch
★
Morgan Stanley
★
UBS
Index products
★
JPMorgan EMBI
★
JPMorgan GBI-EM Index
References
1. Top 50 bank holding companies
2. J.P. Morgan is largest U.S. hedge-fund firm
3. New York Bank History
4.
5.
6. Bank subsidy for Ground Zero move
7. Organization Hierarchy of JPMORGAN CHASE & CO.
External links
★
JPMorgan Chase & Co. website
★
JP Morgan admits US slavery links
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