SWOT analysis of JP Morgan Chase
This is a detailed ‘SWOT analysis of JP Morgan Chase’. It aims to analyse the strengths and the weaknesses of JP Morgan Chase. It also aims to explore the opportunities and the threats facing the bank. JPMorgan Chase & Co. is an American multinational bank, headquartered in New York.
Strengths of JP Morgan Chase
JP Morgan Chase is the largest bank in the United States. This is the result of the merger of J.P. Morgan and Company and Chase Manhattan Corporation in 2000. JP Morgan Chase is also one of the oldest financial institutions in the United States with a history dating back over 200 years (JPMorgan Chase & Co., 2021).
JP Morgan Chase has presence in over 100 countries. Its total asset is around $2.6 trillion. It serves a diverse group of customers e.g. small and medium size businesses, corporations, government clients, and individual consumers (JPMorgan Chase & Co., 2021).
JP Morgan Chase enjoys a strong financial position and has performed strongly across its businesses over the years. For instance, it earned $24.4 billion in net income on revenue of $103.6 billion in 2017 (JPMorgan Chase & Co., 2021). Its profit in 2018 was $32.5 billion. In 2020, its net revenue was $119.54 billion (Norrestad, 2021). It is worth mentioning that its financial performance has been very consistent for a long time.
JP Morgan Chase has bought back approximately $40 billion in stock in the last five years potentially making earnings per share in the next five years to be 2% —3% higher. It reported recently a 6 percent rise in its core loan portfolio and a 12 percent increase in credit card sales volume (Sweet, 2021). In fact, the bank has increased market share substantially in most of its businesses.
JP Morgan Chase is very famous for its corporate social responsibilities. For instance, it deployed around $324.5 million in global philanthropic and business investments in 2019 and plans to deploy $1.75 billion by 2023. Its employees volunteer a huge number of hours every year in their communities (JPMorgan Chase & Co., 2021).
Weaknesses of JP Morgan Chase
A number of controversies have affected JP Morgan Chase the last several years. For instance, the UK Financial Services Authority (FSA) fined the bank £33.32 million for failing to protect billions of dollars of clients’ money from 2002 to 2009. In 2011, the bank made an admission of wrongly overcharging thousands of military families for their mortgages. It was also fined for poor risk management practices and conflicts of interest in its advisory business.
While JP Morgan Chase operates in over 100 markets, it depends heavily on its US operations. This overdependence on the US market is also regarded a weakness. If there is any crisis in this market, the impact on the bank could be massive.
JP Morgan Chase suffered from a technical glitch in February 2018. Its online banking system experienced a security issue that allowed some users to access to the account information of others (Panda Security, 2018). The affected customers had expressed their frustration on social media over the issue. Technical glitches may happen to any company; however, when it happens to such a massive company, customers’ confidence may take a bit hit.
Opportunities for JP Morgan Chase
JP Morgan Chase offers its customers different types of credit cards. Credit card use is on the rise around the world, particularly, Americans are using their credit cards more than ever. The bank has good potentials to benefit from this rise.
Expansion of the bank’s geographic reach is also worth exploring. This will help JP Morgan Chase increase its global market share. It has recently created a crypto currency (JPM Coin) to help settle payments between clients in its wholesale payments business (Russon, 2019). Crypto currency is another area of future growth and development.
Threats to JP Morgan Chase
Threat is the last element to be addressed in the SWOT analysis of JP Morgan Chase. The bank faces threats from a number of competitors because of its operations in over 100 markets. The main competitors are Bank of America, Wells Fargo, Citigroup, Goldman Sachs, Morgan Stanley, and HSBC.
Regulatory changes, recession, and financial crisis (both domestic and international) are likely to impact on the operations of JPMorgan Chase badly. However, it is worth noting that these factors may affect any bank, not JPMorgan Chase only.
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Last update: 10 June 2021
JPMorgan Chase & Co. (2021) About us, available at: https://www.jpmorgan.com/about (accessed 01 June 2021)
Norrestad, F. (2021) Net revenue of JPMorgan Chase from 2006 to 2020, available at: https://www.statista.com/statistics/270609/net-revenue-of-jpmorgan-since-2006/ (accessed 07 June 2021)
Panda Security (2018) JP Morgan Chase Becomes a Victim of a Technical Glitch, available at: https://www.pandasecurity.com/mediacenter/news/jp-morgan-technical-glitch/ (05 March 2019)
Russon, M. (2019) JP Morgan creates first US bank-backed crypto-currency, available at: https://www.bbc.co.uk/news/business-47240760 (accessed 09 March 2019)
Sweet, K. (2021) JP Morgan Chase earnings rise 24 percent in third quarter, helped by U.S. consumer, available at: https://eu.usatoday.com/story/money/2018/10/12/jpmorgan-chase-posts-strong-third-quarter-earnings/1611721002/ (accessed 08 March 2021)
Photo credit: Forbes.com
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.