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Transcript of JPMorgan Chase
Meghan Wyant JPMorgan Chase Objective Major Milestones Conclusion Provide our audience with a better understanding of JPMorgan Chase's internal and external operations, which have allowed them to become to become one of the most successful banks in the world.
We are examining the different environments JPMorgan Chase is influenced by in order to generate a strategy so the company can maintain a competitive advantage in the future. History In 1799, Aaron Burr, a U.S. Senator and future Vice President of the U.S, founded The Bank of the Manhattan Co.
By 1930 it was the world's largest bank with assets over $2.7B
JPMorgan Chase was founded in New York in 1871 as Drexel, Morgan & Co. by J. Pierpont Morgan and Philadelphia banker, Anthony Drexel
In 2000, The Chase Manhattan Corp. merged with JPMorgan Chase, keeping the name JPMorgan Chase Home Banking by Computer:
In 1985, The Chase Manhattan Bank launched its electronic home banking service, called Spectrum.
Not only did Spectrum permit banking transaction bu also allowed customers to buy and sell stocks through a discount broker affiliated with Chase.
Underwriting Commercial Paper:
In 1987, The Chase Manhattan Corp. became the first commercial banking institution to receive Federal Reserve approval to underwrite commercial paper
Commercial Paper - unsecured promissory notes for a specified amount to be paid at a specified rate.
Underwriting - the detailed credit analysis preceding the granting of a loan, based on credit information furnished by the borrower Customer Loyalty Financials and Stock Charts Employees Financial Discussion Company Description Vision & Mission Statements Mission Statement:
"At JPMorgan Chase we want to be the best financial services company in the world. Because of our great heritage and excellent platform, we believe this is within out reach."
To provide unparalleled service to our clients by empowering them with strong analytical insights that enable them to be more effectively manage their human assets. Executive Team On December 31, 2005, James Dimon was named the CEO of JPMorgan Chase
One year later, on December 31, 2006, he was named chairman of the board.
Dimon has proven to be a great leader, as his bank looked like the model of a well-run bank during the financial crisis in 2007 and 2008. Management Stability Economic Forces Environmental Forces Energy efficiency reduces costs
Committed to using clean energy
The economy relies on resources and ecosystems
An unhealthy environment will negatively effect the financial industry because it is dependent on economic growth
Reduced resources and ecosystems
Increases cost of energy Demographic Forces Income gap between rich and poor is growing
More and more of society is relocation to cities for better employment opportunities
Developed countries' population is expected to see little to no population growth besides immigration from undeveloped countries Social Forces Corporate Social Responsibility (CSR)
Engage in community activity
Develop challenged neighborhoods
Programs that support financial literacy
Concerned with society's attitudes and values
Financial competency of society Political/Legal Forces Many different levels of government: Federal, State, County, City, etc.
Complexity of regulations
Difference between states and countries
Conflicts/disagreements between nations may complicate business
Frequent changes in regulations and laws
May affect day to day operations
Long term goals
Exchange rates Bargaining Power of Buyers Buyers: Low to none
Customer cannot produce the service themselves
No economic power
Non-negotiable rates Bargaining Power of Suppliers Investors:
Understanding of market
Rates are non-negotiable
High need for services
Easy to change banks
Supplies & Equipment:
Significant portion of business
Easy to switch suppliers
inputs are limited
significant portion of business Corporate Social Responsibility
Become more involved in schools
Partnership Teach importance of financial responsibility influence need to become economically involved Broaden target market
Reach out to school-aged children
Customer lifetime value In 2012 there were 258, 965 JPMorgan Chase employees
This total was a -0.46% growth in employees from the year 2011. JPMorgan Chase is ranked the number one in total asset with $2,265,800,000,000
In the last year, their total assets have increased by almost 3.8%
In 2009, their total revenue was $68,419,000,000 compared to total revenue of $91,658,000,000 in 2012.
Their net income in 2012 was $21,284,000,000 compared to net income being $11,728,000,000 in 2009
Their return on assets was 0.92% which is just below that of the average in the banking industry.
Their return on equity was 10.98% which is just above the average of the banking industry. Nationwide financial services company headquartered in Manhattan, NY
Retail Financial Services
Consumer banking, small business banking auto and education, finance, insurance and home financing, mortgages and home equity loans
Four distinct client groups
Institutions, retail clients, ultra high net worth clients
Three client segments
Middle market, mid-corporate, real estate
Two centralized principal activities
Global treasury, staff functions In the beginning of 2012, James Dimon decided to shuffle JPMorgan Chase's management.
Barry Zubrow, who runs risk management and was a crucial player for the bank during the financial crisis.
Zubrow now heads corproate regulatory affairs
Dimon also clarified that he would still resort to asking Zubrow about his risk related issues. Recession
Cause JPMorgan to
take a heavy hit
(Net Profit Margin 5.52%in 2008)
Down from 13.21% in 2007
As the global economy fluctuates, so to will the profitability of JPMorgan Threat of New Entrants Low threat because of:
Government regulation protection
Cost of switching Rivalry Among Competing Firms High rivalry
Lack of differentiation among banks
All competitors have incentive to lead market
Equally balanced competitors
Expansion internationally Threat of Substitute High threat
Less internationally involved
Only operates in 60 countries
Bank of America operates in 150 countries
Rates are higher than some institutions
Many banks are available as substitutions
Bank of America, Barclays, CitiGroup Competitor Analysis Works Cited Currency in Dec 31 Dec 31 Dec 31 Dec 31
Millions(USD)as of: 2009 2010 2011 2012
REVENUE 68,419 86,055 89,660 91,658
GROSS PROFIT 68,419 86,055 89,660 91,658 JPMorgan Chase's
stock chart the last