JPMorgan begins First Republic makeover as it opens more branches

First Republic Bank

11/12/2023 15:49

(Updates with details on revamped branches in 12th paragraph)
    By Nupur Anand
       NEW YORK, Dec 11 (Reuters) - JPMorgan Chase  JPM.N  is
preparing to overhaul branches it acquired from failed First
Republic Bank as the lender expands its formidable national
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  BAC.N  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 two revamped locations will be reopened as the
first-ever JPMorgan branches focused on affluent clients and
have a different design than Chase retail branches. They will
probably incorporate some of First Republic's signature perks,
like umbrellas, cookies and coffee.
    "The strategy here is to take some of the white glove
service that First Republic had, and their clients love, and
marry that with the scale 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 nice recipe" for serving affluent
clients that JPMorgan aims to retain, Roberts said. 
    "There is an opportunity to do that more there by elevating
training and we are figuring out how we can accomplish it," she
added.
    The morning after the acquisition was announced, Roberts and
O'Donovan were at First Republic's headquarters in San Francisco
to plan the integration and addressed employees to allay their
concerns after the bank collapsed.
    While there have been some departures, a majority of First
Republic employees who moved to JPMorgan in July have stayed
put, a spokesperson said.
    "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 said. 

 (Reporting by Nupur Anand in New York; Editing by Lananh Nguyen
and Nick Zieminski)
 ((Nupur.Anand@thomsonreuters.com; +1 646 240 2975;))