Three years after Jamie Dimon became the nation’s lender of last resort in the rescues of Bear Stearns Cos. and Washington Mutual Inc., he is leading the industry by financing a $20 billion loan to AT&T Inc.
JPMorgan Chase & Co.’s chief executive officer solidified his firm’s spot as the top U.S. mergers-and-acquisitions bank over Goldman Sachs Group Inc. with the March 20 announcement that it’s advising AT&T on a $39 billion bid for Deutsche Telekom AG’s U.S. wireless unit, T-Mobile USA Inc. New York-based JPMorgan committed to providing $20 billion to AT&T.
“He wants to win, and he doesn’t want to win by a small amount,” Richard Bove, an analyst for Rochdale Securities LLC in Lutz, Florida, said yesterday in an interview. “He wants to win big and dominant. He wants to be known as the next J.P. Morgan.” Bove has a “buy” rating on JPMorgan.
Bove called the AT&T deal a “blockbuster transformational transaction” and said Dimon may be the most powerful U.S. banker since his company’s namesake, John Pierpont Morgan, helped resolve the panic of 1907.
Dimon, 55, flew to Tokyo from Hong Kong today to speak with employees and meet clients affected by the March 11 earthquake and tsunami, said a person with knowledge of the trip who declined to be identified because the travel plans haven’t been made public.
Dimon may be the only banker in the U.S. who could complete an unsecured loan as large as the AT&T deal as he wields JPMorgan’s $2.12 trillion in assets, Bove said.
“This is not the first time that they’ve used their balance sheet to gain market share,” said Moshe Orenbuch, an analyst at Credit Suisse Group AG in New York. “They have enough capital that they don’t have to shy away from clients. They can take on a large commitment.” Orenbuch rates JPMorgan “outperform.”
Dimon’s only possible competition on a transaction that large would be Goldman Sachs, led by CEO Lloyd Blankfein, or Morgan Stanley, “and Jamie’s going to feel more comfortable where his capital is,” said Paul Miller, a former examiner for the Federal Reserve bank of Philadelphia and analyst with FBR Capital Markets in Arlington, Virginia. “This gives Jamie Dimon a huge advantage out there.”
Goldman Sachs, the fifth-biggest U.S. bank by assets, has less than half the common equity of JPMorgan with $70 billion while Morgan Stanley has about $48 billion, according to Bove. Rivals including Citigroup Inc. and Charlotte, North Carolina-based Bank of America Corp. have been hobbled by soured mortgage investments and losses from other consumer loans, Bove and Miller said.
Stephen Cohen, a spokesman for Goldman Sachs, JPMorgan’s Jennifer Zuccarelli and Pen Pendleton of Morgan Stanley, the sixth-largest U.S. bank, declined to comment.
JPMorgan agreed to buy Bear Stearns amid the credit crisis in March 2008, helping the investment bank avert a bankruptcy that could have further damaged the U.S. economy. Later that year, Dimon bought Washington Mutual for $1.9 billion after the Seattle-based thrift was seized by federal regulators.
Dimon, who’s been CEO since the end of 2005, maintained profits throughout the financial crisis. After graduating from Harvard Business School in 1982, he went to work for family friend and mentor Sanford Weill. Together, the two built the firm that became Citigroup, now the third-largest U.S. bank.
Dimon was fired by Weill in 1998 and in 2000 was hired to run Bank One, a regional lender in Ohio that was acquired by JPMorgan in 2004.
JPMorgan, which was third behind Goldman Sachs and Morgan Stanley in M&A advisory for 2010, is leading the league tables this year. The bank’s North American M&A operation is run by Jim Woolery and Chris Ventresca.
Its investment bank, run by Jes Staley, ranked No. 1 for the third year in a row among the 20 highest-paid investment advisers in 2010, collecting $4.14 billion in fees for M&A as well as debt and equity underwriting, according to data compiled by Bloomberg.
Andrew O’Brien, JPMorgan’s co-head of syndicated and leveraged finance, put together the package for Dallas-based AT&T.
“JPMorgan can now go around to the biggest corporations in the world and say, ‘Look at what I did, look at how I protected my customer,’” Bove said. “They have enormous advantages in the market.”