JPMorgan cuts to the Chase in California
After buying Washington Mutual Bank last fall in a government-backed deal, JPMorgan Chase & Co. intends to discard the giant thrift’s brand name in the spring and to add branches in California this year despite the ailing economy.
New York-based JPMorgan, which currently has no retail presence in California, will rebrand the 708 WaMu branches in California with Chase’s octagonal blue logo on March 30, JPMorgan Chief Executive Jamie Dimon said in Los Angeles on Wednesday.
“WaMu’s name itself is a little tainted,” he said. “We’re trying to do this very gently for the customers.”
Calling the California locations, including the 241 in the Greater Los Angeles area, the “crown jewel” of the acquisition, Dimon said Chase, JPMorgan’s consumer banking business, would spend $75 million to open 20 new branches in the state in 2009. An additional $300 million will be spent to refurbish WaMu’s existing locations and 1,900 ATMs in the state, he said.
No California branches are targeted for closure.
“We’ve always wanted to be in the retail business out here,” Dimon said. “California has been one of the best and fastest-growing markets in America. It’s at the forefront of the country. As a national company, you want to be everywhere.”
Chase has relationships with more than 13 million Californians via credit cards, mortgages and other loans, the company said.
The California makeover is JPMorgan’s first step in rebranding more than 5,000 WaMu retail locations in 23 states that is expected to take the rest of the year.
The combination with WaMu is predicted to be complete around October, when the California branches are to be fully integrated with Chase’s computer systems, Dimon said. His remarks came at a news conference in Universal City and in an interview with The Times.
Some cafe-style branches that WaMu staffed with “concierge-tellers” will be converted into more traditional Chase outlets, Dimon said.
Although no Washington Mutual branches are being closed in California, 4,200 of the 9,000 WaMu jobs that JPMorgan said last month it would eliminate are or were in California, including 1,600 in San Francisco, JPMorgan said.
Half the job cuts have taken place. The rest are expected to occur by the end of the year.
Seattle-based Washington Mutual grew rapidly during the housing boom to become the largest U.S. savings and loan and one of the country’s biggest mortgage lenders. But it was brought down by surging defaults on loans made without sufficient collateral or proof of borrowers’ ability to make payments.
JPMorgan Chase bought Washington Mutual for $1.9 billion in September, immediately after the failed bank had been seized by federal regulators. Six months earlier, JPMorgan had acquired failed brokerage Bear Stearns at the behest, and with the help, of the Federal Reserve.
Dimon said he would be reluctant to take on any more such deals.
“We’re pretty busy, and we can’t do too many things all at once and do it well,” he said. “So we’re not looking, but if something came our way that was so unbelievable, we’d consider it.”
Dimon said JPMorgan estimated that it would record nearly $30 billion in losses on nonperforming WaMu loans it had acquired, but he said the acquisition would be worthwhile even if those losses were bigger.
“If we have to spend $10 billion more on it in the end, we will have done the right thing for the long term,” he said.
As part of a previously announced two-year plan to reduce foreclosures, Dimon said JPMorgan would open nine regional counseling centers in California this year for customers struggling with mortgage payments.
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