Company Overview

JPMorgan Chase & Co. (JPMC), the largest U.S. bank and a leading global financial services firm with assets of $2.2 trillion and operations in more than 60 countries, is the result of one major merger and several smaller ones. It’s a market leader in offering corporations a complete platform of capital-raising, advice, trading, and risk-management services spanning commercial and investment banking.

The current firm was created July 1, 2004 by merging Bank One, formerly the sixth-largest U.S. bank holding company with $275 in assets, with the former J.P. Morgan Chase, then the second-largest U.S. bank with $793 billion in assets.  The new firm is a colossus that nips at Citibank’s heels—a leader in investment banking, financial services for consumers and businesses, financial transaction processing, asset and wealth management, and private equity. It is also considered the savior of both Bear Stearns Co. and Washington Mutual, which JPMorgan acquired in 2008.

Under the JPMorgan and Chase brands, the firm serves millions of American consumers and many of the world’s most prominent corporate, institutional, and government clients. JPMC’s component firms were also created by blockbuster mergers of the late '90s. In 1998, Bank One stunned its hometown of Columbus, Ohio, when it plunked down $28.9 billion to acquire First Chicago NBD Corp. and create the fifth-largest bank in America with $240 billion in assets—then turned around and moved into the latter’s Chicago headquarters.

As for the former J.P. Morgan Chase, it remained two firms until December 2000: J.P. Morgan, known for credit derivatives, fixed income, and loan syndication, and Chase Manhattan, then the third-largest commercial bank with a burgeoning investment banking unit. The two shared a long history. While J.P. Morgan grew on its own, Chase grew by devouring Chemical National Bank, the Manhattan Company (later the Bank of Manhattan), Chase National Bank, Hanover Bank, Phoenix Bank, the Brooklyn Trust Company, and the Manufacturers Trust Company among others, with acquisitions dating back to 1799. In 1930, Chase National become the world’s largest bank in terms of assets and brought the Rockefeller family into the business by merging with Interstate Trust and Equitable Trust (whose president, Winthrop Aldrich, was David Rockefeller’s uncle).  

By late 1999, Chase was a powerhouse consumer bank and budding investment bank, although it hadn’t broken through to the first tier of I-banking. The J.P. Morgan merger solved this problem and was hailed a winner by analysts who expected the combined firm to grab leadership in both underwriting and commercial banking. Then came the dotcom crash that killed the IPO market, the 9/11 attacks that ratcheted up one of the worst I-banking recessions, the lost loans to Argentina, and the damning implications of fraud and heavy fines in the Enron mess.  The firm’s earnings were hammered during those years, falling from $5.7 billion in 2000 to $1.7 billion in 2001 to $1.66 billion in 2002.

JPMorgan Chase managed to shake off the challenging early 2000s, however, by starting 2003 with two consecutive quarters of blockbuster profits. Earnings per share climbed 121 percent from 2004 ($2.43) to 2006($4.51). JPMorgan Chase worked hard to cut costs during the tough times of 2001 to 2003, but cost-cutting went even further under chairman and CEO Jamie Dimon, whose frugality and fury toward wasted spending is legendary on Wall Street.

Despite some significant mortgage-backed securities write-downs in 2007 and 2008, the bank’s power and cache remain strong. The bank ranked number 12 on the Fortune 500 ranking of American companies and number 32 on Fortune’s list of the world’s largest companies in 2008. And while the bank cannot escape the impact of the recession, JPMorgan Chase has fared far better than many of its competitors. Case in point: the firm swooped in to save teetering Bear Stearns & Co. in March of 2008 and Washington Mutual in September of the same year. Though JPMorgan Chase is looked upon as the savior of these massive companies, a number of individuals who had accepted jobs with the defunct Bear Stearns had their offers rescinded—and JPMorgan announced it would lay off 21 percent of WaMu’s employees by the end of 2009.