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With mobile banking, JPMorgan Chase & Co. is making it easier for customers to avoid visiting branches. Then why is the New York banking giant opening so many new ones while other banks are closing theirs?
May 31 -
JPMorgan Chase & Co. announced Monday that it will open 100 branches in California this year, bringing total locations in the state to more than 900.
April 4 -
The additions would come as JPMorgan Chase looks to aggressively grow its network in Florida and California, said Charlie Scharf, the company's chief of retail financial services.
February 15
JPMorgan Chase & Co. would like to expand its 5,300-branch retail network into new markets with a huge blitz of office openings, according to Jamie Dimon, the New York company's chairman and chief executive.
"One day, we'll do a De Novo test," Dimon said Thursday during an investor conclave in New York sponsored by Sanford C. Bernstein and Co.
"Boom: 200 branches … One day we might go into Nashville, or Philadelphia or Washington, D.C. I want to try that somewhere."
The $2.2 trillion-asset company said in February that it may open as many as 2,000 branches over the next five years, primarily in Florida and California. It entered those states when it acquired Washington Mutual in 2008 and sees a chance to steal business from other banks by saturating those regions with new offices.
JPMorgan Chase is bullish on branches even though branch traffic has been falling due to mobile and online banking. One-third of its branch traffic comes from small businesses, Dimon said, and customers prefer to open new accounts or take out loans face-to-face.
"Think of them; they're sales offices," Dimon said, adding that branches that have been open several years tend to generate at least $1 million in profits annually.
Opening new offices "is what we should be doing," because banks that aren't constantly refurbishing or changing their physical footprint "die," he said.
Dimon said that he was optimistic about the long-term prospects of the economy and the housing and banking industries. But he said the housing market may continue to slide in the near term before it gets better. He said he expects home prices to decline another 3% to 6% before rebounding over the next 18 months. People will eventually need to buy homes again as the economy recovers, he said.
"We're in the worst of it right now," Dimon said. "You have a very high level of distressed inventory."
