Banking is considered one of the most essential activities in the financial sector. Humanity’s desire to have a reserved place for commercial transactions in the 17th century led to the creation of banks. However, the banking world was still a relatively new idea to most continents until late 18th century when most banks began to appear. Tracing back its roots to the late 18th century in Manhattan, New York City, Chase Bank is indeed one of the oldest financial institutions. The interest of the current research is solely based on how the bank established under JP Morgan & Company has risen to become one of the most successful banks in the current world. Besides, there is a need to understand the future for Chase Bank in the tight banking competition.
Establishment, Location and History of Chase Bank
The history of Chase Bank dates back to over two centuries ago and involves the merger of several banks and institutions that would later result in the thriving banking behemoth of the 21st century (Wile, 2013). JP Morgan & Company, one of the richest companies in the world, is considered the trigger force behind Chase Bank. However, the bright future of the entity began in 1955 when Chase Bank merged with Burr’s company in Manhattan to form Chase Bank Manhattan (Wile, 2013). The three-decade period from 1961 set the best stage for the success of JP Morgan Chase Bank as a result of several mergers of regional banks within New York. During this period, Chase Bank Manhattan faced a stiff competition by the then largest bank in the entire world, namely Chemical Bank that also kept merging with other regional banks.
The late 20th century saw Chemical Bank purchase Chase Bank Manhattan in a deal that was considered a major blow. However, Chase Bank Manhattan that had already developed several branches in over 100 countries all over the world had to retain its name. In 2000, Chase Bank Manhattan was already a well-developed and thriving financial hub and managed to even purchase its founder JP Morgan & Company for $34 billion before being renamed as Chase Bank (Wile, 2013). With an employment of over 250,000 people, Chase Bank currently stands as one of the richest financial institutions in the entire world with a net worth of over $2.5 trillion in assets (Berger, 2018).
Stock Value of Chase Bank
As a banking entity, Chase Bank offers financial services to its customers all over the world ranging from managing their assets, providing private, investment, and commercial banking, to securities and treasury services even to some governments. As a result, it is undoubted that the bank definitely stands out not only in the banking sector but also the stock exchange sector. Having its headquarters in New York City, Chase bank is definitely not a miss in New York Stock Exchange. The financial institution is traded on the New York Stock Exchange and is recognized under the symbol JPM. It competes alongside 200 other banks in stock value (Berger, 2018). Below is the current graph of the stock value of Chase Bank.
Figure 1. Current graph of the stock value of Chase Bank (Source: NASDAQ)
Analysis of the Stock Value Graph
The graph above shows the stock value of Chase Bank for the last week of November. From the graph, the bank’s stock value currently stands at slightly over 110.40 on November 30th, 2018 and has realized an increase from an opening value of 109.55. The previous closing value of the bank’s stock on November 29th, 2018 was 110.06. The lowest stock value of the bank on November 30th was 109.45, while the largest was 110.54. Stock values rarely move towards a particular direction and fluctuations are expected on the Chase Bank stock value graph (Jackson, 2017). As a result, the stock value of the company today is not necessarily going to be similar to tomorrow. The company’s shares and its current price are best known as market capitalization (Jackson, 2017). Chase Bank’s market capitalization currently stands at $369.75 billion, which is way larger than that of its counterparts, such as Bank of America that has a market capitalization of $275.19 billion.
Expansion Opportunities of Chase Bank
Chase Bank is of no doubt one of the richest and largest banking companies. By currently being the sixth largest bank in the entire world, Chase Bank indeed requires expansion opportunities. However, future expansions for the bank are inevitable taking into consideration the fact that the bank has only existed for less than two decades (Berger, 2018). Consequently, Chase Bank is expected to top the list of the largest banks worldwide by posing a stiff competition to the Industrial and Commercial Bank of China, which is currently the largest despite existing for over four decades (Berger, 2018). Below, there are some expansion opportunities that would see Chase Bank tops the list of the largest financial institutions globally.
Development and Penetration of the Banking Market
The major expansion strategy for Chase Bank lies in the development and penetration of the banking market. Many banking companies have been established over the past decades, thereby creating a stiff competition in the banking world. Chase Bank must rely on improving of the banking services that it offers to the customers to the standards way above that of other financial institutions. By collecting a good banking market information, Chase Bank stands the chance of improving the manner in which it offers the banking services to its customers. Moreover, the entity must also constantly seek selling its existing policies in the banking market and ensure that they are better than those of other banks.
Development of New Products and Services
Industrial and Commercial Bank of China is the largest financial entity in the world due to the fact that it constantly develops new products and services into the banking market. Chase Bank must, therefore, follow suit and ensure that it not only develops the existing products and services but also new products and services. The customers adore inventions, especially in the banking world, and any bank has an expansion opportunity as a result of inventions. From as little as introducing mobile banking to faster money deposit and withdrawal in accounts, Chase Bank has a chance of expanding significantly within the next few decades.
Marketing of New Products and Services
To realize an expansion strategy, every newly developed product and banking service must be properly marketed in a new market. Marketing in a new market is one of the most risky activities in a business setting. Chase Bank must, therefore, regard marketing of its new banking services as a possible setback and limitation. However, if the risk is worth it and can be undertaken, Chase Bank could be the largest financial institution globally. Newly developed banking services by the company must be marketed, especially in those countries where Chase bank branches are unavailable.
Financial Future of Chase Bank in Five Years
Chase Bank is in essence dreaming big for the future and is on the process of reconstructing its customer’s business model with the aim at creating the digital transaction strategy in the next five years. As a result, the company expects to incur profits in the long run by trading losses during the rebuilding process. The company’s digital strategy move has for the past few years shown a steady growth in both the active digital and mobile consumers. With the invention of digital mobile banking options, such as Chase and Finn mobile, the bank is obviously headed to a prosperous future. It may help the institutions reach new markets and acquire more clients.
Apart from that, the bank’s intention to build a stronger capital base that would enable easier alignment to small and medium enterprises terms would give it a strong foundation. Chase Bank has also been offering both Visa and Master Card credit options to customers all around the world and is the only bank that has two of these options. As a matter of fact, the move attracts most customers from other banks that are unable to offer both Visa and Master Card options. The bank’s attempts to become the greatest retail wealth player could also be a major boom for the bank’s expansion strategy in the next five years.
Conclusion
All in all, with the current competitive banking sector, it takes considerable efforts for a bank to stand out. Older banks have a better chance of successfully expanding in the banking world unlike their newer counterparts. However, Chase Bank’s financial success seems to disobey the norm and is actively increasing within just a two-decade period. Several reasons, such as constant focusing on private banking customers by the financial institution, could be responsible for the subsequent prosperity of the bank. The next half of a decade period for the bank might be tied to constant competition to other banks worldwide. Indeed, Chase Bank could stand the chance of not only being the largest financial institution in the US but also in the entire world.
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