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J.P. Morgan profits despite its depositors

View of the headquarters of the investment bank J.P. Morgan Chase in New York. The bank wants to continue raking in profits, but depositors with less than $100,000 in the bank don't have much impact.

Bank 2.0 : How Customer Behaviour And Technology Will Change The Future of Financial Services

Kai Ryssdal: Back in the deepest days of the financial crisis, it seemed like every time you turned around, J.P. Morgan Chase was the last bank standing. It bought up struggling or bankrupt rivals; it made bigger profits than anybody else. And if CEO Jamie Dimon has his way, it's gonna stay like that.

At an investor conference yesterday, Dimon said he'd be "damned" -- his word, not mine -- if the bank doesn't keep turning in record profits. If it's any consolation, none of that's coming off our backs. Another executive at the meeting said that most Chase customers with less than $100,000 in their accounts just aren't profitable.

Marketplace's Heidi Moore picks it up from there.


Heidi Moore: Randy Senatore is a cleaning supervisor in New York City. He does not have anything like $100,000 in his bank account at Chase.

Randy Senatore: I guess I’ll be one of the people who doesn’t get the attention like the elite that are running our country.

Chase officials said it’s not as if the bank wants to reject people with less than $100,000;  that’s most of its depositors. Instead,  it wants them to use more apps and online banking -- services that cost less for the bank to provide. Fair enough, right?

Brett King: The average American consumer today visits a branch two, three times a year?

That’s Brett King, who wrote Bank 2.0, a book about the future of banking.

Still, Chase plans to open 900 more branches over the next three years.

Bert Ely, a banking consultant, said banks think branches attract wealthy customers.

Bert Ely: Their higher-net-worth customers are not only more likely to buy a broad range of services, but are more likely to visit a branch.

When rich customers walk into a branch, it gives Chase a chance to hook them for more expensive services -- like managing their wealth -- which is where the real profit lies.

Even so, King believes banks would still do well to sound less high-handed with their regular customers.

King: It’s almost this philosophy of, “Oh, you’ll be lucky if we let you be our customer.”

Since most people are reluctant to switch banks, it seems they can live with an arrogant tone, as long as they don’t have to pay more fees.

In New York, I’m Heidi Moore for Marketplace.

 

About the author

Heidi N. Moore is The Guardian's U.S. finance and economics editor. She was formerly the New York bureau chief and Wall Street correspondent for Marketplace.
Bank 2.0 : How Customer Behaviour And Technology Will Change The Future of Financial Services

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