J.P. Morgan Chase (FIN 460 - 01)

J.P Morgan Chase
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J.P Morgan Chase
Table of Contents
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Introduction  PAGEREF _Toc339095042 \h
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History of the Bank  PAGEREF _Toc339095043 \h
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Bank’s Charter  PAGEREF _Toc339095044 \h
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Number of States it operates  PAGEREF _Toc339095045 \h
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Troubled Assets Relief Program  PAGEREF _Toc339095046 \h
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Stress Test  PAGEREF _Toc339095047 \h
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Financial Statements  PAGEREF _Toc339095048 \h
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Balance Sheet  PAGEREF _Toc339095049 \h
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Financial Ratios Computation and Comparison  PAGEREF _Toc339095050 \h
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Stock Performance  PAGEREF _Toc339095051 \h
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Introduction
JPMorgan Chase bank is a leading worldwide firm offering financial services. It operates in over sixty states including Arizona, Georgia, Florida, Colorado, California, Idaho, West Virginia, Washington, Texas, and New York Michigan among other states. It owns assets of about 1.3 trillion dollars. The firm takes lead in offering financial services to consumers, commercial banking, small businesses, and investment banking. It also offers processing of financial services, private equity, and asset management.
History of the Bank
It was founded in the New York City way back in the year1799, by JPMorgan and Chase. Since its founding in the year 1799, the bank has grown and developed by ensuring that the customer’s services are available at any given time they are in need of them. As the world financial operating firm, it has opened up and serves almost fifty countries. In the earlier times, the bank was called JPMorgan Chase & Company. The Company used to combines the two prime brands of the world: Chase and JPMorgan. The bank has since the time of its foundation take lead in the provision of financial services related to finance to its customers, investment services of banking, banking of small and commercial businesses, processing of transaction related to finance, management of assets and the owners capital (Mullineux, 2003).
Bank’s Charter
The bank’s charter currently is a national bank. It is a Fed member commercial bank, which is supervised by the Office Of currency Controller It converted its charter to national bank immediately before the merger with Ohio, Colombes, bank one, Illinois and Chicago on fifteenth November 2004. Before it was converted to national bank, it operated under state-charter.
The bank is based on the foundation of above one thousand precursor organizations. These organizations came together because they had common interests in their objectives in order to form the current company. The many other custom bank for the Chase bank are as follows; Chase Manhattan bank, JPMorgan and company, national bank of Detroit, Chicago national Bank, the chemical bank, manufactures trust company and the first bank. Each of these institutions objectively aims at improving their services to the people, according to the development of technology. The institutions are closely associated to the innovations of finance, growth of United States of America, and the world economies.
This bank made its first enormous growth in the year 1879, when it sold its stock to New York central Rail road, which was owned by William Vanderbilt, without considering the share price. Any entrepreneur, who dealt with the largest amount of stocks during that particular time, was considered as strong wholesaler of security and the capital mobilize. From there, the Morgan firm was then closely associated with the industry of rail road’s, which was considered in the united states of America as overwhelming all the way through, towards the end of the nineteenth century, because of its congestion and wars, although Morgan Pierpont took an opportunity over the situation. He then became the consolidator of the industry. He reorganizes all the financial troubles that had affected the railroads industry, through reduction of the associated costs.
Through this influence, Morgan played a vital role in the early twentieth century during the time of financial crisis where he saved many trust companies including the house of brokerage recovering the city of the New York and saving the stock exchange of the city from its fall.
In the 1920s, there was a decline of about twenty percent of all the banks in their operations due to a voluntary liquidation, failures and mergers. There was an act called the Federal Reserve act of the year 1913, which removed many legal obstacles in the chartering of the branches in other countries located overseas. This was ironical because some banks, for instance chase found easier to establish their branches in the other countries overseas. The laws set in the United States of America, which forbids the setting up of branches within the country stimulates the setting up of branches overseas.
After the Chase bank had acquired five banks at around 1920s, and the establishment of three branches in the Latin America .i.e., Panama and Cuba, also amalgamated with the Equitable Trust Company in the New York at around 1930. After this company merged with the Chase bank, a company in many countries became part of the Chase bank. These companies were called Equitable Trust, which had its branches in Tianjin, Shanghai, Hong Kong, Paris, London and Mexico City. In the beginning of the year 1930s, Chase bank began to be the most popular bank with so many branches overseas, with its presence in Latin America, Asia, and Europe.
Despite the fact that the banking industry had an abundance of finance to lend in the whole of nineteen twenties, there was a low borrowing by the large corporations in those days. Instead, these corporations chose to borrow less, just to finance the small part of their financial requirements, in the bond and stock markets. Following these phenomena, the banks opted to begin the new lending outlets, which will enable the maintenance of the usual lending rate. This included giving loans to individuals who speculate the stock market (Brigham, 2012).
This will enable customers to increase their funds, because as the stock rose, it enables the stock to yield the solid returns. However, in the year 1929, the market crashed. This tragedy made many loans that had been taken by the customers, to be defaulted. The banking industry faced the most difficult time in the year 1930s, because they experienced loan losses, excess withdrawals by the depositors, and fall of the speculative investments, that was made earlier in the 1920s. This financial panic affected most financial institutions, even those which were well managed with substantial capital and sound financial policies, like the Chase bank. In the middle of the year 1932, almost all customers who had deposits in the first bank withdrew all the money because there was a rumor that the bank had beco...