How Chase fuelled a feud at JPMorgan
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BANKING

How Chase fuelled a feud at JPMorgan

The success of Chase’s past merger ventures seemed to bode well for its link-up with JP Morgan. But those deals of the early 1990s had brought together commercial banks and didn’t have to reckon with integrating culturally alien investment bankers. On the execution front, the merger has proved messy, with blood-letting among JP Morganites in New York being matched by Chase losses in Europe. Beyond this – in itself enough to worry shareholders – there are concerns that underperforming JP Morgan was not the ideal medium for Chase’s equity market aspirations and that the deal was ill-timed, damaging Chase’s well-deserved reputation for clever risk-management skills in choppy markets.

Walking along Wall Street, Clayton Rose bumped into a former colleague. It was the day in September last year that Chase and JP Morgan announced their $35 billion merger. Rose, JP Morgan's global investment banking head, was offered congratulations. "Well, we'll see," was all he could muster in reply. 



He wasn't alone in his doubts. Many of his colleagues shared this latent resentment at being taken over by what they saw as the commercial bankers from Chase. 



A year later, most of the senior executives from the old JP are no longer with the bank. Former CEO Sandy Warner, head of investment banking Clayton Rose and head of asset management Ramon De Oliveira are just three examples, and only two of Morgan's executives sit on the combined bank's board. 



Some of the biggest revenue producers have also left, and the two businesses Chase lacked and allegedly bought Morgan for - equities and M&A - are both run by Chase executives. 



Two separate factors have helped to obscure these post-merger developments. First, this has been the year where a big balance sheet and a big presence in loans and bonds has been crucial to bank profitability, and JPMorgan Chase has a formidable presence across the board. 









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