Magazine article American Banker

JPM Chase Shakes Up Investment Bank

Magazine article American Banker

JPM Chase Shakes Up Investment Bank

Article excerpt

J.P. Morgan Chase & Co. is realigning its investment bank -- cutting jobs, eliminating some co-heads, and re-creating the squads of bankers that peddle investment banking services to potential and existing customers.

The company is betting that the productivity project will add $4.5 billion to $5 billion in fees on top of the $2.5 billion it already makes from securities underwriting, strategic advice, and loans and other corporate finance services. The gains would come from winning new corporate clients and getting more assignments from current customers.

An analyst from Merrill Lynch & Co. estimates that job cuts would result in $200 million to $400 million of severance charges for Morgan Chase in the current quarter.

Wall Street has been reeling from a lack of demand for investment banking, particularly for lucrative assignments advising on mergers, so many firms have been looking at cutting costs and boosting productivity. With legions of rival bankers chasing so few deals, investment banks have shuffled coverage groups and are drawing up lists of "most wanted" corporate customers. Many are pitching their ability to offer one-stop "relationship-oriented" advice.

What's ironic is that Morgan Chase, whose advertisements say "the right relationship is everything," admits to falling short in this. Fewer than 30% of its investment bankers call on more than five companies each, and on average each of them is working on only about one transaction at any given time, according to Geoffrey T. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.