JPMorgan Chase makes Birmingham a growth market for consumer banking – Birmingham Business Journal
JPMorgan Chase plans to bring a total of seven branches to the Birmingham metro area along with additional locations in Huntsville and Tuscaloosa, according to consumer banking leadership.Jennifer Piepszak, co-CEO of consumer and community banking and a member of the operating committee for JPMorgan Chase, said the company plans to open 12 branches in Alabama over the next several years, excluding its existing Auburn and Tuscaloosa branches and the local branch downtown on 20th Street. It’s part of a nationwide effort to move into untapped areas.
“Birmingham is a top-50 retail banking market,” Piepszak said. “It’s a very attractive market. And so why not Birmingham?”
Plans are also in place to open five branches in Huntsville.
As of summer 2021, JPMorgan Chase had established retail presences in all lower 48 states and ranks highly in terms of deposit market share in New York City, Los Angeles and Chicago — but has much smaller presences in other major cities.“We have less than 1% share in Boston, Philly and D.C. And so there’s just an enormous opportunity to expand into new markets,” Piepszak said.
She added she believes it is currently easier than in the past to expand consumer banking organically.
“Density is less important than it used to be because you have digital assets as well,” Piepszak said. “Having said that, deposit share and branch share are still highly correlated, up until at least 10 or 15%.”
She said it’s very difficult to get 10% deposit share in a market without having 10% of the branches there.
“The overall retail banking industry is consolidating,” Piepszak said. “So 10% of branch share today is fewer branches than it was five or 10 years ago, and it will be fewer branches in the future. But it’s happening more slowly than I think people thought, because people still really value branches .”The bank had 4,458 branches as of June 30 according to the FDIC. Piepszak said she would expect JPMorgan Chase’s branch count to remain relatively flat over the next several years, but added it’s possible that number could grow over the next 10 years as consumer banking expands into untapped areas.In addition to Birmingham, Piepszak said she sees significant growth opportunities in Atlanta, Minneapolis and Baltimore. She said the bank will be focused on establishing meaningful retail presences in all of the top 75 U.S. markets.
And when asked how the current rising interest rate environment would affect consumer banking strategy, Piepszak responded:
“If you want a sustainably successful retail banking franchise, you have to always be building branches through the cycle, regardless of the interest rate environment.”
Another area of focus for JPMorgan Chase’s consumer banking operations will be expanding wealth management .
Piepszak said JPMorgan Chase has consumer banking or credit card relationships with roughly half the affluent households in the U.S., but investment relationships with a very small percentage of them.
“So we have a real opportunity,” she said.
Plans are to expand self-directed, digital wealth management options and wealth management teams .
Piepszak said the consumer banking business currently has over $600 billion assets in its wealth management business, which it plans to grow to $1 trillion by 2025. The bank also currently has roughly 5,000 advisers in its branches , which it plans to grow to 6,000.
She added she believes it is currently easier than in the past to expand consumer banking organically.
“Density is less important than it used to be because you have digital assets as well,” Piepszak said. “Having said that, deposit share and branch share are still highly correlated, up until at least 10 or 15%.”
She said
“The overall retail banking industry is consolidating,” Piepszak said. “So 10% of branch share today is fewer branches than it was five or 10 years ago, and it will be fewer branches in the future. And when asked how the current rising interest rate environment would affect consumer banking strategy, Piepszak responded:
“If you want a sustainably successful retail banking franchise, you have to always be building branches through the cycle, regardless of the interest rate environment.”
Another area of focus for JPMorgan Chase’s consumer banking operations will be expanding wealth management.
