JP Morgan Chase (JPM) is the 2nd largest publicly traded bank in the US, and 16th largest publicly traded corporation overall. Both JP Morgan Chase and Wells Fargo (WFC) released their earnings yesterday. JP Morgan Chase was down over 4% at the time of this writing, while Wells Fargo was down about 1%. For more detailed analysis on Wells Fargo, see this article.
JP Morgan Chase Overview
As the 16th largest publicly traded corporation in US markets, JP Morgan Chase is a truly massive enterprise worth of $220 billion. JP Morgan Chase divides its operations into 5 segments. Each segment is listed below along with the percentage of total net income contributed to JP Morgan Chase in full fiscal 2014:
- Consumer & Community Banking: 42% of total income
- Corporate & Investment Banking: 32% of total income
- Commercial Banking: 12% of total income
- Asset Management: 10% of total income
- Corporate/Private Equity: 4% of total income
The Consumer & Community Banking segment is the company’s largest, followed by the Corporate & Investment Banking segment. Together, these two segments account for nearly three quarters of the company’s net income.
Competitive Advantage
JP Morgan Chase’s competitive advantage in consumer and community banking come from its network of 5,600+ Chase Bank locations. The company’s sprawling network of community banks makes it convenient for a large share of the US market to bank at Chase. In addition, the company has been focusing on customer service. JP Morgan Chase has ranked #1 in customer satisfaction in the large US bank category for 3 consecutive years according to the American Customer Satisfaction Index. The company’s convenient locations and quality customer service make it an easy banking choice for many customers.
JP Morgan Chase’s other large profit center is its Corporate & Investment Banking segment. The company has a competitive advantage in investment banking thanks to its long corporate history and excellent connections and relationships with the business community in general. JP Morgan Chase is currently the leader in global investment banking fees, with an 8.1% market share.
