JP Morgan is one of the largest banking institutions in the world. It has a retail banking segment, an investment banking arm, an asset management division, and a commercial banking division. This diversification has allowed the bank to remain steady even during the pandemic. Banks that were overly dependent on retail banking or commercial banking experienced greater challenges. However, those with investment banking and trading divisions were able to take advantage of the volatility in the stock markets to make up for the lost revenues. If you are an investor who is looking to invest in banking stocks, then business diversification is something that you may want to consider when selecting investment candidates.
Strength’s of JP Morgan
JP Morgan is among the leading banks in the US and the world. It has the highest assets and deposits. JP Morgan is among the largest credit card issuers. The bank is considered to be among the largest bulge bracket investment banking names. The size and scale of the bank allow it to raise funds at a low cost and use its extensive network of retail operations to earn fees. The scale and prudent management have also allowed JP Morgan to operate more efficiently than ever before. JP Morgan has historically fared better than many of its peers during times of crisis. JP Morgan is taking technology seriously and has a tech budget of more than $10 billion per year. By leveraging technology, the operational efficiency of the banking institution is bound to improve further.
The big names like Bank of America and JP Morgan are currently down for the year 2020. One name, Morgan Stanley, seems to be an exception. Its stock is up 30% year-to-date. JP Morgan is down 12.5% while Bank of America is down 16.5% since the year 2020 began. Wells Fargo seems to have performed the worst in the year 2020. Its stock is down 45% year-to-date.