© Reuters. FILE PHOTO: The doorway to a First Republic Financial institution department is seen within the Chinatown neighborhood of New York Metropolis, U.S., April 28, 2023. REUTERS/Shannon Stapleton/File Photograph
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By Nupur Anand
NEW YORK (Reuters) – JPMorgan Chase (NYSE:) is getting ready to overtake branches it acquired from failed First Republic Financial institution (OTC:) because the lender expands its formidable nationwide footprint.
“Branches have been a winning strategy for us that is helping us capture more market share,” Jennifer Roberts, CEO of Chase Consumer Banking, told Reuters in an interview.
Of the customers who hold deposits with the bank, 75% visit a branch annually, she said.
The largest U.S. lender has more than 4,800 branches across 48 states. By the end of this year, JPMorgan is likely to open 167 locations, exceeding an earlier projection of 150, Roberts said.
Rival Bank of America is also adding branches. The moves contrast with a national decline as consumers use more online services. U.S. banks closed 123 branches and opened 80 in October, bringing the total number of active bank branches at the end of the month to 77,690, according to S&P.
JPMorgan added 84 branches when it acquired First Republic in May, the largest bank to fail since 2008. In June, JPMorgan announced plans to shut 21 of those locations.
“Even though there could be some branch network consolidations, the total number of new branches would be higher and you will see our branch network growing,” Roberts said.
JPMorgan had the highest net branch openings in the U.S. in October, opening 22 branches and closing 14 others, according to S&P. In the last 12 months, the company has opened 157 branches and closed 163.
FIRST REPUBLIC’S RECIPE
JPMorgan has retained 90% of First Republic customers, Marianne Lake, Co-CEO of JPMorgan’s consumer and community bank, told investors last week.
The lender will start the branch makeover by shutting two flagship sites in New York and San Francisco that will reopen in June.
“The technique right here is to take a number of the white glove service that First Republic had, and their shoppers love, and marry that with the dimensions that JPMorgan has,” said Mark O’Donovan, the CEO of Chase Home Lending who is among the executives overseeing the First Republic integration process.
First Republic had a “very good recipe” for serving affluent clients that JPMorgan aims to retain, Roberts said.
“There is a chance to try this extra there by elevating coaching and we’re determining how we will accomplish it,” she added.
The morning after the acquisition was introduced, Roberts and O’Donovan had been at First Republic’s headquarters in San Francisco to plan the mixing and addressed staff to allay their considerations after the financial institution collapsed.
Whereas there have been some departures, a majority of First Republic staff who moved to JPMorgan in July have stayed put, a spokesperson mentioned.
“Even though we saw some attrition in the summer mainly from the sales team or bankers who were in client relationship roles, it has largely stabilized now,” O’Donovan mentioned.
