To put it simply, Morgan has always been an investment bank, but its investment banking business suffered heavy losses in the high-tech bubble. In order to improve its competitiveness, it merged with Chase Manhattan to become an investment bank and a commercial bank. Although they both had business , but they are managed separately, equivalent to two subsidiaries, with different headquarters locations.
JPMorgan Chase & Co., headquartered in New York, is already the second-largest bank in the United States, second only to Citigroup. In the late 1990s, after the restrictions on separate financial operations were lifted, J.P. Morgan merged with Chase Manhattan to form the second largest bank in the United States with total assets of $800 billion, operating in more than 50 countries. Bank One is also the sixth largest bank in the United States, headquartered in Chicago, with assets of $320 billion.
The merger of the two banks can be described as a strong alliance. The main reason for the merger between the two giants is the complementarity between businesses. JPMorgan Chase's strength is investment banking, and it will be positioned in high-tech company business and stock investment. After the high-tech bubble burst, JPMorgan Chase suffered heavy losses and needed to find new business aspects to reduce the company's operating risks. For First Bank, although it ranks among the top ten in terms of asset size, has 1,800 service outlets, and has 51 million credit card users, its business is mainly concentrated in some states in the Midwest and Southwest. In New York, the world's financial center The impact is very limited and the local characteristics are obvious. At the same time, First Bank's main business is concentrated in personal consumer credit, and it has very little experience in corporate credit. In the face of increasing competition in the U.S. banking industry, First Bank is also in urgent need of finding new ways to develop.
It is precisely because of the good complementarity between the two that the merger plan has received support from shareholders of both parties. After the merger, the company will spend three years cutting costs by $2.2 billion and laying off 10,000 people. At the same time, the company will have 2,300 service outlets. The investment banking business and commercial bank retail banking business centers will be located in New York and Chicago respectively. The new bank will uniformly use the name of JP Morgan Chase, and the name of First Bank will withdraw from the stage of history.