Bank One And Lasalle Bank Comparison

Bank One

In 1929, Commercial National and City National Bank of Commerce of Columbus, Ohio, merged to form City National Bank and Trust. City National offered the first Visa credit card outside of California in 1966; it also created the first drive-up bank, and was one of the first banks to use ATMs. A holding company called First Bank Group of Ohio was formed and it became Bank One in 1979. As interstate barriers to banking fell, the bank moved into Indiana, Kentucky, Michigan and Wisconsin.

The First National Bank of Chicago and Bank One merged on October 2, 1998. The merger between Bank One Corporation and First Chicago NBD Corporation created what became known as Bank One, Chicago's largest bank (one of the largest in the Midwest and nation). Bank One Corporation and its stock was traded under the New York Stock Exchange under the symbol One. This merger created the nation's 5th largest Bank with assets of more than $240 billion.

Bank One is a major corporate bank nationally and in selected international markets in 11 foreign countries, the nation's largest credit card company which also is a leading retail bank in eight states, the leading business bank in the Midwest and Arizona, and the largest bank mutual fund company. With assets of more than $270 billion currently, Bank One Corporation is one of the nation's largest financial services companies. Bank One currently serves more than 53 million credit card customers nationwide as well as 7 million companies in 14 states. It also manages more than $149 billion of assets for investors. The bank has 74,000 employees at 2000 branches in 14 states. On July 1, 2004 Bank One became a part of the new JP Morgan Chase. The mergers of the credit card companies, broker/dealer and lead banks will be completed over the next nine months. JP Morgan gives Bank One scale and size. However, the Bank One brand continues to be used in the marketplace.

Bank One provides several services to its customers, some of which include, retail services, Commercial Banking, Card Services, Investment management group. The retail service is broken down into, checking and savings accounts, consumer lending, Small business Banking, Debit/ATM Cards, Investment Accounts, Credit Cards, Insurance, Auto loans and leases, Online Banking and Home loans. The Investment Management Group is broken down into portfolio management, mutual funds, financial planning, brokerage, private client services, corporate and personal trust, alternative asset management, insurance, securities lending, custody and master trust. The commercial services is broken up into global cash management, commercial lending, loan syndications, commercial cards, investment grade securities, derivatives, foreign exchange, and global trade. On the credit-card side, the services can be further broken down into credit cards, affinity cards, reward cards, smart cards, stored-value cards and business cards.

Its most competitive environment right now is its Retail and Credit card services. This unit of its business has proved to be volatile and problematic for the bank. The unit has recently won some important new alliances, including Amazon.com and Walt Disney Co. But analysts question whether growth will ever return to the levels that were considered normal in the 1990's. According to Bear Stearns', credit card loans is at the lowest level seen in 20 years, so there is intense competition in that industry, one reason is because home equity loans are so low that card borrowing makes less sense for consumers. While the bank has made a lot of progress fixing inherited problems, competitors who are less burdened have continued moving ahead. Many of these competitors are attacking Bank One in its core markets, including Chicago. Major players such as Bank of America and Washington Mutual are entering this market, while established competitors such as Fifth Third Bank are also competing fiercely. Some of Bank One's top competitors are Citigroup, LaSalle, Bank of America, Wells Fargo and Company and Fifth Third Bank.

According to SNL Financial (www.snl.com), after the merger of Bank One and JP Morgan, the company has a market share of 12.76% in Illinois. LaSalle Bank has a market share of 10.04%; Citigroup has a market share of 1.87% while Fifth-Third has a market share of 2.45% in the State of Illinois.

Many of the functions of Bank One are now being integrated with JP Morgan due to the merger between the two organizations. One key outcome of the JP Morgan and Bank One merger/acquisition is that now Bank One and JP Morgan Chase together can rival the footprint in retail banking that Citigroup possesses.

While Bank One has over 2,000 physical bank branch locations, in which the bank's retail and commercial clients can use as a footprint for customer contact, many of Bank One's operational processes are automated and delivered through information technology. For example, Bank One's Internet website which is accessible with secure log on features for both retail and commercial banking clients is used in place of many bank services that had typically been performed at branch sites in the past. Bank One's online bank services are widely considered some of the best in the industry. Sophisticated information technology which drives these online services is essential to Bank One's operations. JP Morgan has recently announced that many of the IT related activities that they have been outsourcing will now be brought back in house. According to an IT manager at J.P Morgan Chase, "the bank plans to begin talks aimed at restructuring the agreement with IBM once the financial aspects of the Bank One acquisition are completed." (Computerworld 6/14/2004) J.P Morgan had been outsourcing thousands of IT related jobs and work to IBM. The shift in bringing many of these functions back in house can certainly be attributed to Bank One's strategy of bringing "most of its IT operations back in-house since late 2001 as part of an initiative spearheaded by Dimon and managed by CIO Austin Adams." (Computerworld 6/14/2004)

Many changes and improvements could be made to the IT related operational processes at both Bank One and JP Morgan Chase over the coming periods.

Other key operational processes performed at Bank One are related to the bank's credit card processing division. The card issuing and processing divisions are also very heavily built on IT related activities. It remains to be seen how these processes will change with the J.P Morgan merger, although major changes are unlikely.

The organizational structure and business units of Bank One are being integrated with J.P. Morgan. There are now five main business divisions.