Chase exec tours with pep rally to dispel financial fears
Jamie Dimon’s getting-to-know-you bus tour of the West Coast, planned last spring, couldn’t have come at a more awkward time for the JPMorgan Chase & Co. chief executive.
With financial shares flopping around like penny stocks, the Fed keeping interest rates near zero and fears of a global recession, it’s not exactly a comfortable time for bankers.
But Dixon — dressed in jeans and polo shirt — took to the tour this week from Seattle to San Diego like a head cheerleader.
Visiting locales that had branches of failed Washington Mutual Bank, which JPMorgan Chase took over, Dimon delivered a no-panic message as he schmoozed with rich clients at a Santa Barbara cookout, met with Mayor Antonio Villaraigosa at a branch under construction in Los Angeles and rallied the troops.
Pumping up his enthusiasm before stepping off the tour bus into a frenzy of pompon-waving employees in Encinitas, he body-slammed Pablo Sanchez, the executive overseeing Chase’s expansion in the West.
Dimon said his goal on this tour was to break out of his usual pattern of site visits, which was usually to meet a few key executives and clients in a big city, get on a plane and head back to New York.
“I just thought, ‘Why don’t we get off the beaten path, out with employees that never get visited by anyone high up in the company’ ” he said.
Many observers thought the economic turmoil would force him to bail out of the trip, said Todd Maclin, Chase’s head of consumer and business banking. But Dimon, relaxed, caustic and sometimes joking, said the banking system shows no sign of freezing up the way it did during the 2008 crisis.
“There’s always a chance, a possibility, of something like that,” he said Thursday afternoon as his black tour bus — which also carried several other bank executives — cruised through Orange County. “But we don’t think so. I’d be back in New York if I did.”
In staying the course on his West Coast tour, Dimon became a prime example of the financial industry’s push to assure the public, government and shareholders that the banking system is now far better capitalized and more conservatively managed than when its near-collapse triggered the long global recession.
“The public is crying out for confidence and information,” Steve Bartlett, president of the Financial Services Roundtable, said in a recent memo to the big institutions that back his lobbying group. “Several CEOs are doing this and it is paying big dividends for them and for the industry as a whole.”
Dimon did acknowledge public fears. “A lot of smart people say there are good reasons not to invest in the bank at this time — and they’re right,” he said at one point. But then he quickly added that he was speaking from a short-term perspective.
Long-term, he said, his bank will recover and prosper, thanks to investing even during challenging times in things such as the giant California market.
Chase, which previously had no retail presence in California, outbid three other banks in September 2008 for Wamu, paying $1.9 billion to regulators for the largest U.S. bank ever to fail. That gave Chase 720 branches in the state as of mid-2009, according to SNL Financial. But Dimon has been adding branches since then.
Bank representatives say Chase has 879 California branches, compared to 956 for Bank of America and 1,043 for Wells Fargo, and nearly 20,000 employees in the state. Ryan McInerney, head of Chase’s consumer bank, said that by 2015 the bank would hire an additional 5,000 employees in California and add at least 400 more retail offices, ranging from supermarket branches on up.
Some larger locations will have a “bank within a bank” space where customers with at least $250,000 in assets to invest will have access to research and counseling from Chase’s private banking arm.
During the event with Villaraigosa in downtown Los Angeles, Chase executives suggested that the mayor might make use of the service. But the mayor wasn’t biting. “On my salary?” Villaraigosa said with a shrug.
In addition to adding branches and private banking services, Maclin said Chase sees opportunity in lending to what’s known as the middle market — businesses with $20 million to $500 million in yearly sales.
So far, Chase has yet to make many inroads in that space, said Dominic Ng, chairman of Pasadena’s East West Bancorp.
“Chase has mainly been a force in the retail or very small business areas since it took over WaMu,” Ng said.
As the tour bus rolled south across Camp Pendleton, Dimon commented on several issues that banks are facing. He summed up the foreclosure robo-signing scandal and its aftermath as an “unmitigated disaster.” Of proposed new regulations for banks he said, “We support 75% of it.” But he added, “We have the OCC, the FDIC, the Fed and now the CFPB all looking at what we’re doing. There’s going to be all kinds of overlap.”
And he dismissed complaints that banks are not doing much lending. “It’s just not true,” Dimon said. “If you go to Wells, they’ll say the same thing.”
He appeared to be mocking himself — or maybe not — as the driver steered the bus into the suburban Encinitas shopping center where the cheering managers, tellers and loan officers lined up outside a Chase branch to greet him.
“You just watch,” Dimon said before striding into the bank to praise the employees’ dedication. “We’ll show them how the big guys do it — the guys from New York.”
