JPMorgan Chase announced Friday that it expects to save more than 20,000 WaMu workers at the bank’s branches and wealth management division from getting a pink slip this Christmas.
The retention of WaMu’s branch staff is not just an altruistic move — it points up the geographic synergy between the two financial institutions, and the importance of branches as a sales channel for this national banking behemoth. Case in point: JPMorgan had virtually no presence in California, whereas WaMu has at least 680 of its more than 2,200 branches and 9,000 branch staffers located in the state.
While WaMu has made forays into other parts of the country, most of its branches and its business are centered on the West Coast. New York-headquartered Chase has developed its presence primarily on the East Coast. The banks’ branch networks do overlap in some states, like Texas.
Chase and WaMu will only close about 10 percent of their 5,400 combined branches. This gives Chase the second biggest branch network in the country, just behind Bank of America.
More importantly, the branches and the staff that run them will play an increasingly important role for the combined bank. Charles Scharf, Chase’s retail head, said earlier this month that he has long “coveted” WaMu’s impressive branch network, which will give Chase immediate entry into new markets throughout the West Coast.
Meanwhile, the suits in WaMu’s Seattle headquarters and staffers in the bank’s operations may want to start polishing up their resumes. Indeed, 1,600 WaMu back-office workers in California have already been told their jobs will be cut by March, and more of WaMu’s executives and operations staff will be laid off since their positions overlap.
Chase is likely to modify many of WaMu’s funky retail-inspired branches to its own more conventional designs as it brings them into the fold. Those branches will become the most critical sales channel for relationship-focused Chase to sell WaMu’s existing customers and prospective customers in these new markets on its own products, namely investment products as pointed out in an American Banker article, since WaMu sold its own proprietary mutual fund business in 2006.
