Jpm Boa Jp Morgan Chase

JPM BOA

JP Morgan Chase was founded in 2000 through the merger of Chase Manhattan and JP Morgan & Co, the latter of which was founded in 1895. The JP Morgan side is the investment banking and asset management side of the business, while Chase is the retail brand. The bank expanded in 2004 with the purchase of Bank One, bringing now CEO Jamie Dimon into the company. At the outset of the recession, the bank acquired Bear Stearns and Washington Mutual. The company's recent credit history has been affected by a trading loss in early 20112 of $5.8 billion (Farrell, 2012). Moody's notes that the company recovered to post a $9.1 billion pre-tax, pre-provision profit. The positions created during the scandal were by this point closed out and did not result in long-term damage to the company's liquidity (Moody's, 2012).

The combined entity of JP Morgan Chase today is a diversified financial services provider. Its activities include investment banking, hedge funds, asset management and private wealth management. It also has a retail banking operation and a sizeable credit card business, much of which was acquired through Bank One. By 2011, JP Morgan Chase had become the largest lender in the United States by assets (Son, 2011).

Bank of America was founded in 1904 as the Bank of Italy in San Francisco. The name shift occurred after the company bought the Liberty Bank of America in 1927. The Bank first expanded outside of California in the early 1980s and from that point worked to build a national retail branch network. Much of this growth was fueled by a series of acquisitions of regional banks as successive waves of consolidation took place in the American industry. Some of the most important acquisitions were Fleet Bank in 2004 MBNA in 2005. The latter acquisition brought to Bank of America a significant credit card business. Bank of America added Merrill Lynch. The extent of that company's trading losses was significant, and it affected the financial health of Bank of America. The Bank would eventually receive $20 billion from the federal government as part of TARP and extensive loss guarantees.

According to Moody's the legacy issues related to the Merrill transaction and the TARP era have left Bank of America is a difficult financial position, and continues to drag on growth and profitability at the company. Bank of America credit is rated Baa2, compared with A2 for JP Morgan Chase. Both of these banks have similar structures and similar product lines. Bank of America is more heavily oriented towards retail, while JP Morgan Chase has a strong investment banking business. The latter factor contributes to the superior stability of JP Morgan's business.