JP Morgan Chase: Customers with less than $100,000 are useless

[marmar]

(Bloomberg) JPMorgan Chase & Co. (JPM), the largest U.S. bank by assets, said about 70 percent of customers with less than $100,000 in deposits and investments will be unprofitable following regulations that cap lenders’ fees.

“I’m trying to give you a proxy for what the banking industry has to look forward to if you don’t take into account business bank clients and getting more of the affluent wealth wallet,” Todd Maclin, chief executive officer of consumer and business banking at the New York-based company, said today at an investor presentation.

JPMorgan and the other biggest U.S. banks are grappling with lost revenue from regulations such as those that cap debit interchange fees and overdraft charges, making customers with low deposits more expensive for lenders to manage. JPMorgan, run by CEO Jamie Dimon, sees its greatest opportunity with affluent customers that have more banking relationships with the company, Maclin said.

“Lost revenue has to be replaced with higher share of wallet and customer penetration,” Maclin said. “You have to get your costs and where you spend your time, to the fullest extent possible, more in line with where the opportunity is.” .............(more)

The complete piece is at: http://www.bloomberg.com/news/2012-02-28/jpmorgan-views-clients-with-less-than-100-000-to-invest-as-unprofitable.html

[Fawke Em]

1. I'm guessing JPMorgan will be useless after Anonymous gets to them.

You just know Anon will go after this bank now.

[Zalatix]

6. Let us hope they do.

BTW love that name "Fawke em". It applies so perfectly right now!

[Hugabear]

17. Time to bring ALL of the major banks down

Burn them to the ground (figuratively). These major banks have been nothing but vultures. They are the ones holding OUR money - how fucking dare they complain that we aren't letting them hold enough!

[ParkieDem]

2. It's disgusting, but

He's probably right. I've never understood how my bank has ever made money off of me as a customer. Free checking, no fees, paying decent interest .... Hard for me to see how I'm profitable, but hey, not my problem.

[marmar]

3. No fees? Clearly you've never banked with Chase.

nt

[ParkieDem]

7. Actually,

I banked with Chase for several years and never incurred a fee - I actually liked that experience, with their apps that allow you deposit checks just by taking a picture of them, newfangled ATMs that made deposits easy, etc.

Their interest rates sucked, though, so I recently switched to a local bank that gives a good deal and has no fees (for me, anyway).

[backscatter712]

11. Any time you use a debit card, the bank issuing the card takes a fee.

Just talk to any small business owner that has a merchant account - they pay through the nose to be able to accept debit cards and credit cards.

And banks could always make money through the old-fashioned method - lending money, using your deposits to back it up - they've always made tons of money that way.

[FarCenter]

15. PIN entry debit transactions are cheap; signature debit and credit card transactions are not

So do PIN entry if you want to be kind to the merchant, instead of your bank.

[joeglow3]

16. Every account has a fixed cost to maintain

If they are making a spread on only a $500 or $1,000 balance, I highly doubt that covers their costs. Of course, these are oftentimes the people who need a vehicle like this to start saving money in.

[zipplewrath]

12. They have your money

Make no mistake, even if they don't have it long, having your money has value. The margins may be small, but somethings really are made up "in volume". Now, that is what most folks mean by "profitable", not that they don't make money, but that they don't make as much money as they think they should. Your grocer probably makes about 3% on you. Your bank on the other hand expects to make in the 13% range.

All you have to do is realize that your local bank, or your credit union will be just fine with your money to realize that money can be made, it's just a matter of how much.

[Fawke Em]

18. They use your money to lend.

Even if your average balance is only $50 or less, it's still on their balance sheets and that's what they get to loan.

You earn, what, maybe .001 percent on your savings, if you have any, but they loan it out at 6 percent. They make money off you.

[badtoworse]

4. Not surprising. A hundred grand isn't what it used to be.

[HopeHoops]

5. I thought that was a given.

[xxqqqzme]

8. And this attitude

ISN'T class warfare?



I am so happy I switched to a credit union 10 years ago.

[grasswire]

9. I wonder what market share 3% of all U.S. bank customers is for Chase.

If that's all the "wallet" they want, is that even enough?

[FarCenter]

10. Retail banking is pretty unprofitable

The money is made by taking large deposits from people who have money and lending it out to people who don't have money.

Taking small deposit, processing payments, etc. is a poor business. It's time for another wave of consolidations and branch closings.

[dixiegrrrrl]

13. "a higher share of wallet penetration"

*shudder*

[pinboy3niner]

14. "and customer penetration”

*double shudder*

[lonestarnot]

19. w/o a fucking kiss!

[hughee99]

20. "Customer penetration" is banker-speak for "fucking you" n/t