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JPMorgan to Expand in Philadelphia, Open 50 Retail Branches

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JPMorgan (JPM - Free Report) recently announced that seeks to expand in Philadelphia and the Delaware Valley. This is part of its plan to expand into 15-20 new markets. The bank will be opening 50 retail branches and hire around 300 new employees in the region by the end of 2023.

Further, JPMorgan will invest $3 billion toward mortgage and small business lending in the area and $5 million to help revitalize Philadelphia's Kensington Avenue neighborhood over the next five years.

Details

JPMorgan has been doing business in Philadelphia and the Delaware Valley region for around 20 years, with its main credit card unit located in Wilmington, DE. This expansion plan will add to the company’s existing retail client base of more than 1million and nearly 30,000 business clients in the region.

In an interview with CNBC, Jamie Dimon, chairman and CEO, said “Obviously, Philadelphia is the seventh-largest market in the United States. That’s not including their biggest suburb called New York. And, you know, we like to be part of the community. We are already here [with] investment banking, commercial banking and private banking. Retail is a gap... We invest for the long run. We never pull in and out of something.”

Specifically, JPMorgan will be opening four branches this year and three more are lined up for 2019. According to Thasunda Duckett, CEO of Chase Consumer Banking, around 30 brancheswill be located in Philadelphia city, the majority of the rest will be in suburbs with a few in Delaware.

Notably, JPMorgan’s both branch models — traditional branch and “Everyday Express” branch —will be used in the region.

Road Ahead

At the time when demand for digital offerings is on the rise, opening of brick and mortar retail branches is a bit surprising. JPMorgan had unveiled its expansion plan earlier this year that included opening of 400 branches in new markets by 2023.

Of the total branch number, the company had announced its plan to open nearly 70 branches in the Washington, D.C., earlier in April. A similar rollout is expected in Boston as well. Notably, as of Jun 30, 2018, JPMorgan had nearly 5,100 branches.

In Philadelphia, the bank will be facing competition from Wells Fargo (WFC - Free Report) , PNC Financial  (PNC - Free Report) , TD Bank and Citizens Financial Group (CFG - Free Report) . Per the Federal Deposit Insurance Corp.data, these banks together hold approximately $190 billion in deposits in the region.

Nonetheless, the bank is betting on its existing customer base and convenience of digital offering to attract new customers. JPMorgan is making long-term investments and doesn’t expect these branches to record profits any time soon.

Shares of JPMorgan have rallied 9.2% so far this year, outperforming the industry’s rise of just 0.4%.



Currently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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