Chase Bank rattles rivals while it builds out branch system
Aug. 21--New York-based financial services giant JPMorgan Chase & Co. (JPM) is shaking up the local banking landscape with a major push to aggressively expand its branch network. Branches are sprouting up everywhere, from San Marcos to Menifee.
The build-out got a recent lookover by flamboyant New York banking leader Jamie Dimon, chief executive officer of JPMorgan Chase, who recently wrapped up a grassroots bus tour to inspect his troops on the West Coast.
Chase Bank is clearly making a major push to expand its market share in California, and, specifically, in economically healthier pockets of the state such as San Diego County and Southwest Riverside County. It currently holds the No. 3 ranking in numbers of branches in the state, behind the No. 1 spot held currently by Wells Fargo with 1,043 and Bank of America with 956. Wells Fargo has 116 branches in the region with 3,367 workers, while BofA has 81 branches with 2,000 workers, according to figures provided by the banks.
Chase, which had no retail presence in California until its $1.9 billion acquisition of thrift behemoth Washington Mutual in September 2008, has 879 branches, or 100 more than when it bought WaMu. It boasts 116 branches in the region, and just fewer than 3,000 employees in the region, according to Chase figures. About a third of the workforce is based at the Rancho Bernardo operations center, which mainly handles mortgage loan processing, automotive finance, and loss mitigation work for loan modifications.
There are plans to open 100 new branches in California by the end of the year, with roughly 12 coming to San Diego County. Others are planned for Southwest Riverside County. Last week, for instance, the framing of exterior walls was being done by contractors stretching from Menifee to San Marcos' affluent San Elijo Hills community. Both those branches are set to open in November.
Fifteen to 20 more branches are planned for the region by the end of 2012.
By the end of 2013, Chase expects to have the largest branch network in the state with more than 1,300 branches.
One Chase executive involved in the branch build out said she's been riding thousands of miles in the car from one end of San Diego County to the other and up through Southwest Riverside County, scouring for real estate opportunities to either build a branch or convert an existing building into a bank.
"There are a lot of good deals," said Nikki Atkins-Hartung, the market manager for branches in San Diego County. She came to Chase in San Diego in early 2010 from Houston where she helped oversee the branch system there for 17 years.
"We look at our current distribution and the holes," she said. "We look for grocery store anchors, and places where consumers go several times a week, like a home improvement store or a pharmacy."
The cost to open a branch -- which employs from 13 to 17 employees -- can range from $2 million to several millions of dollars more, depending on the location, and if the building must be constructed from scratch, or renovated.
Branch openings locally by Wells Fargo haven't been as robust. A Poway branch was opened in June. Prior to then, the bank opened branches in Chula Vista and Del Mar in 2009.
"We continue to see stores as a critical base for sales and service. We regularly review our network and make adjustments as needed to ensure that we are meeting the needs of our customers," said Amy Savicky-Injaian, a Wells Fargo spokeswoman.
"San Diego is one of our primary markets," said Steve Mahinfar, a market executive with Bank of America. "We could open more stores. Today, we have a dominating presence in San Diego and we are very comfortable with the number of branches and associates and how we are servicing the customers," Mahinfar said. "Chase is nowhere near where we are today. They are trying to catch up. They are looking to grow. There is nothing wrong with that. Competition is very healthy."
Dimon rubs shoulders
Dimon, who runs one of the largest banking companies in the world, wanted to listen to employee concerns, chat it up with West Coast executives on the bus from Sacramento to Santa Barbara, and line up barbeques and other events with some of the bank's affluent private banking clients. He stayed at the Grand Del Mar resort in Carmel Valley, following a visit to an Encinitas branch. On his final day here, he rode over to the sprawling Rancho Bernardo banking center with 1,200 employees to pump hands and -- again -- "listen."
He also shot over to Camp Pendleton where Dimon hopes to help build opportunities to hire veterans struggling to find jobs.
In Rancho Bernardo, he gave a house to a veteran who lost two friends when a roadside bomb blew up the armored vehicle they were riding in during the Iraq war. Bank officials would not release his name, but the vet named a son after one of his buddies.
"There wasn't a dry eye in the house," said Peter Barker, president of Chase Bank in California.
Something else also may have caught Dimon's attention on the bus ride through North County: A "stealth comparative advertising" campaign.
San Diego-based branding expert Liz Goodgold said it would have been difficult to imagine that Dimon hadn't noticed some of San Diego County Credit Union's 80-plus billboards lined along the freeways blasting the message, "Chased by HIGH FEES?"
"The billboards are encouraging people to seek out better opportunities for their banking," said Teresa Halleck, president and CEO of San Diego County Credit Union. "Consumers are pretty tired of getting beat to death."
Halleck said the campaign wasn't designed to point the finger at Chase, but "big banks" generally.
Goodgold said that the credit union's campaign is a "stealth comparative" one because it attacks Chase Bank without naming the bank. She explained that the campaign is clearly a response to Chase Bank's advertising campaign launched in early 2008 that changed the "noun" of Chase Bank to a "verb," when it unveiled its sleek brand campaign, "Chase What Matters."
"It's brilliant," said Goodgold of the credit union's response to Chase Bank. "It alludes to Chase without pointing out the name of the bank and you don't get side-by-side comparisons like a taste test. This is what is special about it. You feel like it's an inside joke. Wink, wink, nod, nod," she said. "If he saw this, I think he would say, 'Wow, we're getting the attention of the marketplace in San Diego,'" Goodgold said.
Halleck, whose credit union has 28 branches in the region, isn't so sure about the need to further build out the branch system in the way big banks have.
"Some consumers think you need to do business with a big bank, but you don't need to pay the fees to support the structure," she said. "How many branches do you need when you don't go into them. They're (big banks) going to pay for them, and who do you think is paying for that? The consumer. That fits right with our message."
seekingalpha.com/news-article/...e-it-builds-out-branch-system
Zurück
