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JPMorgan Chase & Co.
Type Public (NYSE
Founded 1799
Headquarters Flag of the United States New York, NY, U.S.
Key people Jamie Dimon, Chairman, CEO, President & COO
Industry Finance and Insurance
Products Financial Services
Revenue ▲ US$71.4 billion (2007)[1]
Net income ▲ US$15.4 billion (2007)[1]
Employees 180,667 (2007)[1]
Website www.jpmorganchase.com

www.jpmorgan.com

www.chase.com

JPMorgan Chase (nyse|JPM) 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 $1.6 trillion, JPMorgan Chase is currently the third largest banking institution in the United States,[2] 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.[3] Formed in 2000 when Chase Manhattan Corporation acquired 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 acquired 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 in the United States and Canada and the bank's retail banking activities in the United States. The JPMorgan brand is used by the Investment Bank.

[edit] Financial data

Financial data in $ millions
Year 2004[4] 2005[4] 2006[4] 2007[1]
Revenue 43,097 54,533 61,437 71,372
EBITDA 7,140 13,740 22,218
Net Income 4,466 8,483 14,444 15,365
Employees 160,968 168,847 174,360 180,667

[edit] History

[edit] 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 and took the Chase 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.

[edit] 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.

[edit] 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.

[edit] 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.
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 of investigation 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 Britain and France. Thus, the company profited from the financing and purchasing 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 refers to John Pierpont Morgan, but, in fact, it is a reference to Henry S. Morgan, who was J. P. Morgan, Jr.'s first son and a J.P. Morgan partner. J.P. Morgan & Co. incorporated in 1940,[5] 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, it was acquired by Chase Manhattan and the new company's name became JPMorgan Chase & Co. The Gramm-Leach-Bliley Act repealed the restrictions of Glass-Steagall and allowed Morgan to resume investment banking services. Besides investment banking, it also offered private banking and private equity services.

[edit] Recent acquisitions

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 valued 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 Indiana operations

On March 14 2008 Bear Stearns & Co. Inc. lost 47% of its market value to close at $30.00 per share.

On or around March 15 2008 the Federal Reserve bailed out the financial firm Bear Stearns & Co. Inc. through a loan secured through JPMorgan Chase.

On March 16 2008, JPMorgan Chase announced that it had plans to acquire Bear Stearns &Co. Inc. in a stock swap worth $2.00 per share or $240 million pending mutual shareholder approval scheduled within 90 days. Until then, JPMorgan Chase has agreed to guarantee all Bear Stearns trades and business process flows.[6]

On March 18 2008, JPMorgan Chase purchased Bear Stearns for $236 million. The stock swap was completed in the late night hours of March 18 2006, with JPMorgan exchanging 0.05473 of each of its shares for one Bear share, which were valued at $2 each. [7]

On March 24 2008, a revised offer was announced at approximately $10 per share. Under the revised terms, JPMorgan immediately acquired a 39.5% stake in Bear Stearns (using newly issued shares) at the new offer price and gained a commitment from the board (representing another 10% of the share capital) that its members would vote in favour of the new deal.

On 26 March 2008, JPMorgan acquired the UK-based carbon offsetting company ClimateCare. [8]

[edit] Banking subsidiaries

JPMorgan Chase & Co. owns four bank subsidiaries in the United States:[9]

  • Chase Bank USA, National Association
  • JPMorgan Chase Bank, National Association
  • JPMorgan Chase Bank, Dearborn
  • J.P. Morgan Trust Company, National Association

[edit] Offices

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, Rochester, NY, Columbus, OH, Dallas, TX, Fort Worth, TX, Indianapolis, IN, Tampa, FL, Orlando, FL, Louisville, KY, Newark, DE, Phoenix, AZ, Milwaukee, WI, Toronto, ON Canada, 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.

The JPMorgan Investment Bank also maintains a number of high-profile offices around the globe, with the largest concentrations outside the US in London, Tokyo, Hong Kong and Singapore. 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. Asset and wealth management groups are located at 245 Park Avenue.

The J.P. Morgan Chase Tower in Houston

Chase tower in Metrotech Center, Brooklyn

J.P. Morgan International Plaza in Dallas

[edit] Controversy

[edit] Legal proceedings

[edit] WorldCom

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]).

[edit] Enron

According to a University of California press release, allegations were filed in national court in an attempt to hold stock advisors responsible for poor investment decisions. The 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.[10]

[edit] Government subsidies and incentives

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.[11] 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.

NEGOTIATIONS FOR NEW OFFICES IN LONDON At the present time in association with the City of London Corporation they are involved in negotiating the construction of a huge building to house their European operations that will completely destroy the symmetry of the Grade Two listing residential complex called the Barbican. This has roused the wrath of the architectural community and major companies that deal in planning. The model that was presented is not only an example of poor architectural design but completely out of keeping with the surrounding community.

As JP Morgan has a long-standing and welcome commitment to the environment and communities they will, no doubt, take this into account in their deliberations in addition to the arguments made by the representatives of the City of London Corporation.

[edit] Environmental Record

On April 25, 2005, JPMorgan Chase announced it's new environmental policy.[12]

[edit] Major sponsorships

JPMorgan Chase owns the naming rights of several venues in the sports world.

[edit] 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.
  • JPMorgan Chase is said to be finalizing a deal to be the principal sponsor for a New York Yacht Club backed America's Cup challenge.
  • JPMorgan Chase is the official sponsor of the US Open Women's Singles Championship.

[edit] Notable employees

[edit] Business

[edit] Politics and public service

[edit] Others

[edit] Notable Awards

2007 Awards:

  • Waters Magazine (Fifth Annual Waters Rankings, June 2007)

"Best Investor Services"

  • ISIPS (Eighth Annual FSmetrics Award Dinner, May 2007)

"Best Custodian Corporate Action Services" "Best Broker Confirmation Timelines"

  • AsianInvestor (AsianInvestor 2007 Achievement Awards, May 2007)

"Best Global Custodian"

  • ICFA (European Custody & Fund Administration Awards, 2007)

"European Custodian of the Year" "Cash Management Provider of the Year" "Technology Vendor of the Year" "Custodian of the Year, Germany"

  • The Asset (Annual Triple A Awards, 2007)

"Best Custody Specialist in Asia" "Best Liquidity Solution Provider"

  • Complinet (Third Annual Compliance Awards, February 2007)

"Most Cost Effective Compliance Technology Provider"

2006 Awards:

BusinessWeek "Top 10 Best Places to Launch a Career"

The Banker (November 2006) "Securities Services Provider of the Year"

Financial-i (Leaders In Innovation Awards, November 2006) "Most Innovative Securities Outsourcing Solution"

Funds Europe (November 2006) "Custodian of the Year"

Waters Magazine (Fourth Annual Waters Rankings, July 2006) "Best Investor Services"

ISF Magazine (Repo/Securities Lending Survey, June 2006) "#1 Overall Cash Provider (In both weighted and unweighted categories)" "#1 for Rates/Price Competitiveness" "#1 in Ability to Deal in Size" "#1 in Currency Flexibility" "#1 in Reporting Capabilities" "#1 in Margin Monitoring" "#1 in Fails Handling"

AsianInvestor Magazine (2006 Achievement Awards) "Best Global Custodian"

Profit and Loss Magazine (2006 P&L Digital Awards) "Editor's Choice Award" "Best Click & Deal Functionality"

Global Investor (Annual Foreign Exchange Client Satisfaction Survey, March 2006) "#1 Best FX Service Overall - Global Investor Top 100 Asset Manager Respondents" "#1 European Respondents Best FX Service Overall" "#1 Asian Respondents Best FX Service Overall" "#1 Real Money - Best FX Service Overall" "#1 Real Money - Most Improved Service Over Last 12 Months" "#1 Best Research in Emerging Markets Currencies" "#1 Best for Trading Emerging Markets Currencies" "#1 Best Advice on Trading Strategies" "#1 Best Daily Research" "#1 Best Economic Research"

Global Custodian (Tri-Party Securities Financing Survey, March 2006) "Top Rated - Europe" "Top Rated - North America" "Top Rated - Overall"

The Asset (Triple A Awards 2006) "Best Custody Specialist"

[edit] See also

[edit] Index products

[edit] References

  1. ^ a b c d http://files.shareholder.com/downloads/ONE/283652050x0x184756/31e544ec-a273-4228-8c2a-8e46127783f8/2007ARComplete.pdf= JPMorganChase & Co.
  2. ^ Top 50 bank holding companies (table). National Information Center (2007-12-31). Retrieved on 2008-03-09.
  3. ^ Barr, Alistair (2007-03-05). J.P. Morgan is largest U.S. hedge-fund firm. MarketWatch. Retrieved on 2007-08-02.
  4. ^ a b c http://www.opesc.org/fiche-societe/fiche-societe.php?entreprise=JPMC OpesC
  5. ^ New York Bank History. Scripophily.com. Retrieved on 2007-08-02.
  6. ^ Guerrera, Francesco (16 March 2008). Bear races to forge deal with JPMorgan. Financial Times. Retrieved on 2008-16-03.
  7. ^ Quinn, James (19 March 2008). JP Morgan Chase bags bargain Bear Stearns. Telegraph.co.uk. Retrieved on 2008-19-03.
  8. ^ JPMorgan acquires carbon offset firm ClimateCare. guardian.co.uk.
  9. ^ Organization Hierarchy of JPMORGAN CHASE & CO. (database). Federal Reserve System. Retrieved on 2007-09-18.
  10. ^ The University of California (2002-04-02). "Update on UC's Enron Investments and Lawsuit". Press release. Retrieved on 2007-08-02.
  11. ^ Bank subsidy for Ground Zero move. BBC News (2007-06-14). Retrieved on 2007-08-02.
  12. ^ http://investor.shareholder.com/jpmorganchase/press/releasedetail.cfm?releaseid=161100
  13. ^ Tony Blair starts $1M bank job - CNN.com

[edit] External links

JPMorgan Chase


Chase Manhattan Bank


JPMorgan & Company



Bank One