JPMorgan Chase was born with a silver spoon in its mouth but that hasn't stopped it from wanting more. With more than $2 trillion in assets, the largest bank holding company in the US has more than 5,500 branches in a couple dozen states (and counting) and is among the nation's top mortgage lenders and credit card issuers (it holds some $132 billion in credit card loans). Active in some 60 countries, it also boasts formidable investment banking and asset management operations. The firm's subsidiaries include the prestigious JPMorgan Private Bank and institutional investment manager JPMorgan Asset Management (with some $1.9 trillion under supervision). It also owns private equity firm One Equity Partners.
In 2011 the company shuffled its operations into six major business segments, plus its corporate and private equity segment. Its investment bank segment includes the firm's primary nonbanking unit, JPMorgan Securities. Retail financial services includes consumer and business banking as well as mortgage banking and real estate lending. JPMorgan's card services and auto segment includes payment processor Chase Paymentech Solutions and student lending. The other three segments are commercial banking, treasury and securities services, and asset management (which includes Highbridge Capital Management with some $21 billion in assets under management).
In 2010 JPMorgan acquired the European and Asian segments of RBS Sempra Commodities, the energy trading joint venture between Royal Bank of Scotland and Sempra Energy. The $1.6 billion deal did not include RBS Sempra's more valuable North American segment. JPMorgan will integrate the business into the bank's existing global commodities business, doubling its corporate client numbers.
Meanwhile, the bank's custody and fund services unit bought the private equity administration services of Schroders. That deal added more than $6 billion in committed capital. J.P. Morgan Worldwide Securities Services already had some $15.3 trillion in assets under custody. In 2011 the company sold its 41% stake in mutual fund company American Century to CIBC for some $848 million.
Despite economic unease around the world related to an earthquake and tsunami in Japan and the European sovereign debt crisis, the company has been performing steadily. Its strategy for growth includes expanding across all of its business lines, from entering new markets and opening new bank branches to increasing its lending activities. However, lower interest income and investment banking fees led to a dip in revenues. Overall, revenues slipped by some 5% in 2011, but the company's net income grew, largely due to a reduction in the provision for credit losses (as a result of improving delinquency trends).
Led by CEO Jamie Dimon, JPMorgan Chase closed a couple of very high profile deals as the economic crisis claimed numerous victims. It acquired Bear Stearns, one of Wall Street's top investment banks, and the operations of Washington Mutual (WaMu), the largest bank to fail in US history. (Both deals closed in 2008.) Dimon is often regarded to be one of the best bank CEOs in the business. JPMorgan Chase bypassed Bank of America as the bank with the most assets in 2011.
JPMorgan also put its money behind the struggling newspaper industry in 2010 with the acquisition of 10% of Gannett, which publishes USA Today and other newspapers. JPMorgan is now Gannett's largest stakeholder. – less