Mergers News
JPMorgan Chase plans aggressive retail expansion
Tue, Feb 15 12:27 PM EST

* Up to 2,000 new branches in next 5 years

* Looking at options to offset $1.3 bln debit card hit

* Shares rise, outpacing index

* Stock usually strong after investor meeting

By Clare Baldwin

NEW YORK, Feb 15 (Reuters) - JPMorgan Chase & Co (JPM.N) will expand aggressively in the next five years in consumer and private banking, even as it loses more than $1 billion in revenue from new financial regulations, the head of the company's retail banking business said on Tuesday.

But Retail Financial Services CEO Charlie Scharf also ruled out expansion by smaller acquisitions, at least for now, in favor of opening new offices.

Chase will add at least 1,000 branches in the next three years and could add up to 2,000 over the next five years, Scharf said at the company's annual investor day.

The nation's third-largest bank by domestic assets said it would target "aggressive growth" in California and Florida in particular. Chase had 5,172 domestic branches as of Sept. 30, 2010, according to Federal Reserve data, third behind Wells Fargo's (WFC.N) nearly 6,500 and Bank of America Corp's (BAC.N) nearly 6,000 branches.

The growth will by and large be within Chase's existing footprint, he added, calling expansion outside the footprint a second priority. He also said there were few attractive opportunities for Chase to grow by buying another bank.

"When you look at our existing footprint, we know exactly who we'd be interested in and not interested in, and we know the same for out-of-footprint and it's not a long list of names. A lot of the smaller transactions that you see for us don't seem to make a whole lot of sense," he said.

Despite beating analyst estimates for fourth-quarter earnings, JPMorgan faces questions about its declining trading volumes, the Madoff scandal, its foreclosure practices and pending financial regulation, which could crimp profits.

Those themes are expected to come up throughout the investor day, and Scharf addressed part of the regulation issue, saying JPMorgan stood to lose $1.3 billion in revenue from the implementation of new regulations on debit card processing fees.

The bank is considering a range of options, he said, including the possibility of some kind of monthly fee.

Shares of JPMorgan rose 1.3 percent in afternoon trading, outpacing a 0.2 percent rise in the KBW Bank Index (.BKX). Two months after the investor day, shares of the bank have historically risen an average of 15 percent, according to a Barclays research note published last week. (Reporting by Clare Baldwin, writing by Ben Berkowitz; editing by Gunna Dickson)

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