JPMorgan Chase & Co. is the world’s oldest, largest and renowned financial institution operating in more than 50 countries. JPMorgan Chase & Co. is a combination of two of the world’s premier financial brands: J.P.Morgan and Chase. It was founded in 1799 and today it is a leading investment banking and financial services firm serving consumers, small business and commercial banking, financial transaction processing asset management and private equity.
History of JPMorgan Chase
JPMorgan Chase is the oldest financial institutions in the world whose roots can be traced back to 1799 when it was chartered in New York City. Its major heritage firms include J.P. Morgan, Chase Manhattan, Chemical, Manufacturers Hanover (in New York City) and Bank One, First Chicago, and National Bank of Detroit (in the Midwest). These firms were dedicated to the growth of their local communities, the United States and global economies.
Origins of J.P. Morgan & Co.
JPMorgan Chase’s predecessor, J.P. Morgan & Co., was founded in New York in 1871 as Drexel, Morgan & Co. by J. Pierpont Morgan and Philadelphia banker, Anthony Drexel. It aided the Europeans investing in the United States, and in this way provided capital support to the American industrial expansion. It went on to become the finest private domestic and foreign bank of the country.
In 1879, it made a record by selling a major chunk of shares of William Vanderbilt’s New York Central Railroad without any fall in the share price. This earned Drexel, Morgan & Co. the reputation of a strong mobilizer of capital and wholesaler of securities. It also led to the long-term association with the railroad industry. It served as an industry consolidator, reorganizing financially troubled railroads by cutting their costs, restructuring their debt, placing their stock in trusts he managed and by appointing loyal senior executives. This ‘Morganization’ was applied to the Northern Pacific, the Erie, the Reading and many other railroads.
In the 1980s, the company then started financing major industrial mergers, including General Electric, U.S. Steel and International Harvester. J. Pierpont Morgan was now well known for being the most influential and powerful bankers and produced solutions during times of economic crises. When gold reserves fell in 1894, J. Pierpont Morgan formed an association to save the gold standard for the U.S. government and, managed to save the through the New York Stock Exchange.
In 1904, J.P.Morgan & Co. helped finance the Panama Canal by raising $40 million for the U.S. government to buy land rights from the bankrupt French Panama Canal Co. During the World War I, J.P. Morgan & Co. played a major role in financing the Allied victory by arranging a $500 million Anglo-French loan for purchases involving everything from horses to artillery shells. Chase National Bank and Guaranty Trust Co. in New York became major players in the underwriting business in 1917.
Only 12 US banks had foreign branches outside the United States by 1965: these were the predecessors of JPMorgan Chase – The Chase Manhattan Bank, Chemical Bank, The First National Bank of Chicago, Manufacturers Hanover Trust Co. and Morgan Guaranty Trust Co. In the 1950s, four of these except National Bank of Chicago merged and credit cards were introduced later on in the 1960s and ATM machines in 1970s.
In 1985, Chase Manhattan Bank launched the electronic home banking service with name of Spectrum, which allowed banking transactions and online transactions reacted to stocks via a Chase discount broker. It also introduced the ‘sweep’ service NOW checking accounts.
The 1990s represented a period of mergers and consolidation for the banking industry
Key mergers
1991: Manufacturers Hanover Corp. merged with Chemical Banking Corp forming Chemical Banking Corp
1995: First Chicago Corp. merged with NBD Bancorp., forming First Chicago NBD.
1996: Chase Manhattan Corp. merged with Chemical Banking Corp., under the name of The Chase Manhattan Corp
1998: Banc One Corp. merged with First Chicago NBD, under the name of Bank One Corp.
2000: J.P. Morgan & Co. Incorporated merged with The Chase Manhattan Corp., under one name of J.P. Morgan Chase & Co.
2004: Bank One Corp. merged with J.P. Morgan Chase & Co.
2008: JPMorgan Chase & Co. acquired The Bear Stearns Companies Inc., moving on to prime brokerage, cash clearing and energy trading globally. Moreover, it also acquired the deposits, assets and certain liability of Washington Mutual’s banking operations.
2010: J.P. Morgan acquired full ownership of its U.K. joint venture, J.P. Morgan Cazenove, one of Britain's premier investment banks.
JPMorgan Chase & Co. Today
JPMorgan Chase & Co. serves millions of consumers today in more than 50 countries in the United States and abroad. Its six major businesses are:
Investment Bank: J.P.Morgan offers a full range of investment banking products and services in all major capital markets to corporations, financial institutions, governments and institutional investors.
Retail Financial Services: This includes credit card, small business, home finance, auto finance, home equity loans, education finance and insurance to consumers and businesses.
Card Services: It is one of the largest credit card issuers in the United States. It provides a wide variety of general purpose cards to satisfy the needs of individual consumers, small businesses and partner organizations.
Commercial Banking: Commercial Banking serves a variety of corporations, municipalities, financial institutions and non-profit entities by offering lending, treasury services, investment banking and asset management.
Treasury & Securities Services: It provides transaction, investment and information services to support the needs of institutional clients worldwide.
Asset Management: JPMorgan Chase & Co. is a global leader in investment and wealth/assets management. It provides services to institutions, retail investors and high-net worth individuals in every major world market.
