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Chase Company Profile |
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Based in New York, J. P. Morgan Chase is the second largest bank in the United States and is recognized as one of the leading financial services firms in the world. The company employees more than 160,000 people and continues to grow through additional mergers and acquisitions. In 2005, J. P. Morgan Chase earned almost $80 billion in revenue.
The company's current CEO, James Dixon, has held the position since the beginning of 2006. He was formerly the head of Bank One until he merged in 2004 with J. P. Morgan Chase. At that time, he was made made president of J. P. Morgan Chase. William B. Harrison Jr., who had been CEO until 2006, became the new chairman of the board.
Company History
J. P. Morgan Chase was formed from a merger between Chase Manhattan Bank and J. P. Morgan & Co in 2000. Before this time, both companies had long histories in the financial services industry.
Chase Manhattan Bank at the time of the 2000 merger had been the result of a number of mergers and acquisitions in the company's history. In 1955, the Bank of the Manhattan company and Chase National Bank merged to form the Chase Manhattan Bank.
The Bank of the Manhattan Company was established in 1799 by Aaron Burr, who served as vice president to Thomas Jefferson. The Manhattan Company had originally been a water company, but Burr had included in the company's charter the ability for it to form a bank.
Chase National Bank, named for Salmon P. Chase who had served as Chief Justice of the Supreme Court and as United States Treasury Secretary, was formed in 1877 by John Thompson who had been a teacher before entering into the banking industry. In 1930, Chase National Bank acquired Equitable Trust – the majority interest of which was controlled by John D. Rockefeller Senior. After Equitable and Chase National merged, they formed the largest bank in the world.
When the joining of Chase National and The Bank of Manhattan was considered, the idea was for Chase to acquire The Bank of Manhattan because it was the larger of the two. However Burr's original charter for his company specified that a merger/acquisition could only take place with unanimous agreement from its stockholders. Since that was unlikely to happen, the merger occurred in reverse and Chase Manhattan Bank was formed.
In 1996, Chase Manhattan was acquired by the Chemical Bank of New York. Chemical Bank started in 1824 after the New York Chemical Manufacturing Company (1823) decided to amend its charter to permit banking activities as well as the selling of chemicals.
J. P. Morgan & Co. started out as Drexel, Morgan, & Co. Two years after the death of Anthony Drexel, the company's name was changed to reflect the control of the senior partner, John Pierpont (J. P.) Morgan.
After the name change, J. P. Morgan grew into one of the most powerful entities in the financial services industry. They provided $62 million in gold to the U. S. government to restore the treasury surplus and financed a number of railroads. The institution provided the financing for the United States Steel Corporation which became the first $1 billion company in America. Through their purchases of a number of boating operations, J. P. Morgan formed the International Mercantile Marine Company which was responsible for building the Titanic. They were also the chief provider of war bonds to England and France, and they arranged the merger that would led to the development of General Electric.
After the Glass-Steagall Act was passed in the 1930's, however, J. P. Morgan & Co. chose to focus on commercial banking. Those in the company who wanted to choose investment banking ended up splintering off and forming Morgan Stanley. Eventually changes were made to the act and by the 1990's, J. P. Morgan & Co. was also working in investment banking.
After the merger between Chase Manhattan and J. P. Morgan & Company, the newly named J. P. Morgan Chase continued making deals that allowed it to grow. For example, in 2004 it acquired Bank One of Chicago. Two years later, they purchase Collegiate Funding Services, LLC and arranged a swap with the Bank of New York which provided an additional 700,000 commercial banking customers.
Chase & Credit Cards
In J. P. Morgan Chase, the Chase arm is focused on commercial banking, including credit cards. The company is the number one issuer of credit cards in New York and is the second largest issuer of VISA credit cards.
In the credit card industry, Chase is most well-known for creating unique cards for its customers. For example, in 2003 they launched the Starbucks Card Duetto Visa. One percent of all the Visa purchases made using the card would be added to a Starbucks reward account for cardholders. They could then redeem these rewards as discounts at Starbucks. In 2005, Chase rolled out an AARP VISA card which provided users with automatic discounts at the point-of-sale.
In late 2005, Chase also introduced VISA and Mastercard credit cards containing “blink” technology to 900,000 card holders on the East Coast. This technology allows for contactless credit card transactions, similar to Mastercard's Pay Pass technology. Chase has partnered with merchants, such as movie theaters and convenience stores, where customers may be in a rush and would appreciate being able to move through the checkout faster. Currently, the cards are accepted at about 1,200 locations.
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