©Reuters. FILE PHOTO: The entrance to a First Republic Bank branch is seen in the Chinatown neighborhood of New York City, U.S., April 28, 2023. REUTERS/Shannon Stapleton/File Photo
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By Nupur Anand
NEW YORK (Reuters) – JPMorgan Chase (NYSE:) is preparing to overhaul branches it acquired from failed companies Bank of the First Republic (OTC:) as the lender expands its formidable national footprint.
“Branch building has been a winning strategy for us that has helped us capture more market share,” Jennifer Roberts, CEO of Chase Consumer Banking, told Reuters in an interview.
Of customers who have savings at the bank, 75% visit a branch annually, she says.
The largest U.S. lender has more than 4,800 branches in 48 states. By the end of this year, JPMorgan will likely open 167 locations, up from a previous projection of 150, Roberts said.
Rival Bank of America is also adding branches. These 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 to 77,690 at the end of the month, S&P said.
JPMorgan added 84 locations when it acquired First Republic in May, the largest bank to fail since 2008. In June, JPMorgan announced plans to close 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 grow,” Roberts said.
According to S&P, JPMorgan had the highest net branch openings in the U.S. in October, opening 22 branches and closing 14 others. In the past twelve months, the company has opened 157 branches and closed 163.
RECIPE OF THE FIRST REPUBLIC
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 kick off the branch makeover by closing two flagship locations in New York and San Francisco, which will reopen in June.
“The strategy here is to combine some of the white glove service that First Republic had, and that their customers love, with the scale that JPMorgan has,” said Mark O’Donovan, the CEO of Chase Home Lending, who the top belongs. executives overseeing the integration process of the First Republic.
First Republic had a “very nice recipe” for serving affluent customers that JPMorgan wants to retain, Roberts said.
“There is an opportunity to do more of that by improving training and we are figuring out how to achieve this,” she added.
The morning after the acquisition was announced, Roberts and O’Donovan were at First Republic’s San Francisco headquarters planning the integration and speaking to employees to address their concerns after the bank went bankrupt.
While there have been some departures, a majority of First Republic employees who moved to JPMorgan in July have remained, a spokesperson said.
“Even though we saw some turnover in the summer, especially in the sales team or bankers who had a role in customer relations, it has now largely stabilized,” O’Donovan said.