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JPMorgan’s Dimon on Comcast, Wall Street, and wooing Philly customers

Dimon says it’s mind-numbing” what small business owners have to go through for basic permitting. “Corruption” and inefficiencies cut the U.S. growth rate in half, he says.

Jamie Dimon, head of JPMorgan Chase & Co., the largest and most profitable U.S. bank, stands at its Center City outpost near the top of One Liberty Place, Wednesday, June 05, 2019. Behind Dimon, among other towers, is the headquarters of Comcast, the largest Philadelphia-based company and a longtime JPMorgan client whose CFO, Michael J. Cavanaugh, formerly held the same post at Dimon's bank.
Jamie Dimon, head of JPMorgan Chase & Co., the largest and most profitable U.S. bank, stands at its Center City outpost near the top of One Liberty Place, Wednesday, June 05, 2019. Behind Dimon, among other towers, is the headquarters of Comcast, the largest Philadelphia-based company and a longtime JPMorgan client whose CFO, Michael J. Cavanaugh, formerly held the same post at Dimon's bank.Read moreHEATHER KHALIFA / Staff Photographer

Jamie Dimon, who has made New York-based JPMorgan Chase & Co. America’s biggest and most profitable bank since he began running it in 2005, says he’s visiting the Philly area more, as his company opens branches here, buys smaller firms, and boosts its local staff, now 10,000, mostly in Delaware, out of 250,000 worldwide.

Dimon, grandson of Greek refugees, gave a version of his let’s-all-fix-America talk at the BIO 2019 Convention in Center City on Wednesday, riffing on tariffs (he’s mostly against them), and American health care, education, and road-building (all not good enough, too expensive, and neglected by squabbling U.S. leaders).

He was urged to keynote BIO "by our investment bankers,” who are always hunting deals among cash- and merger-thirsty biotech firms, Dimon later said in JPMorgan’s Center City outpost, on the 47th floor of Liberty Place, with a view of Comcast’s towers over his shoulder.

“You have huge assets here," including the area drug, device, and cell-and-gene therapy makers who joined national players at BIO, he added. “I think Philadelphia is starting to boom.” So are other aging U.S. industrial cities, including Pittsburgh, whose revival around Carnegie Mellon robotics and energy tech was “unexpected.”

He had dinner the night before at Suraya, the Lebanese restaurant near Frankford Ave. in Fishtown, with Comcast’s chief financial officer, Michael J. Cavanagh, who used to hold the same job under Dimon at JPMorgan. “Mike chose it,” Dimon said, laughing. “He loves Philadelphia. Looks like he’s become part of the community.”

But proximity, even friendship, doesn’t always win business. Comcast is the biggest company still based in Philadelphia, JPMorgan has long ranked among Comcast’s banks, and Comcast executive Stephen Burke is a JPMorgan director. Yet JPMorgan isn’t among the banks lead-financing Comcast’s $40 billion takeover of Sky, the U.K.-based video giant, Dimon acknowledged. For all their relationships, even the biggest bankers can’t afford to stop selling.

Dimon also used the trip for a town-hall meeting at InstaMed, the Center City medical-payments processor that JPMorgan bought the week before for $500 million. He joined cofounder Bill Marvin and his family, and told staff "they can change the world” in their work tracking payments to reduce medical fraud and waste. This eats up to a quarter of U.S. health-care spending, which costs twice what it does in other countries and gives uneven benefits.

Wednesday night, Dimon met at the Barnes with female students and JPMorgan execs, reminding them that half the bosses reporting to him are women, too -- plus with Lutron Electronics boss Susan Hakkarainen , Innophos chief Kim Ann Mink, Tela Bio CFO Nora Brennan, and Comcast Foundation head Dalila Wilson-Scott.

And Dimon gave The Inquirer a wide-ranging, 45-minute interview. Some highlights:

The $43 billion JPMorgan paid to settle government and private mortgage-crisis lawsuits: Dimon was unrepentant. Over half “was from Bear Stearns and Washington Mutual,” troubled firms JPMorgan took off the government’s hands and whose mortgage-market misbehavior “happened before we bought their companies” and should not have been charged to the bank.

Government vs. business: The cost and time that go into government forms and basic permitting, among other government inefficiencies, are a huge burden to small business and cut the U.S. growth rate in half, Dimon maintains.

Breaking up big banks: “If you do business in 14 countries in Asia, you need someone who can make payments and handle loans and bonds in those 14 countries. If American banks won’t be doing it, it will be Chinese banks.” Who in America trusts Beijing more than Wall Street?

Philly bank competition: Dimon welcomed pushback from banks in Philadelphia that have boosted pay to key people and grabbed prime corners, in some cases, to brace for Chase. “We are all upping our game. It’s a good thing for Philadelphia," said Dimon. "We will spend the money and do what it takes to compete.”

ETFs: The mutual fund and ETF industry (led by Vanguard and BlackRock, though Dimon declined to name competitors) “does an extraordinary job of keeping the cost low for the investor, and selling the products. It’s a pretty powerful thing. I applaud them,” Dimon said. “But remember, we can do a lot of what they can’t do,” such as set up country-focused ETFs for large customers.

Wall Street competition: Investment banks and brokerages have targeted middle-class savers, and, for example, Goldman Sachs recently beat JPMorgan Chase to win a deal to issue an Apple credit card. But JPMorgan is both an investment bank and a commercial bank: "Everything they can do, I can do, too.”

ChasePay: What happened to the digital wallet JPMorgan techies spent years developing? “We always said we were not quite sure. We have the ability to try new things. We’re not afraid to be bold -- or to move on, if we need to." Meanwhile, ApplePay and GooglePay have taken off.

What worries him most just now: The gathering trade war. Dimon had hoped to see a China trade deal this year. Now he’s concerned it could take longer. President Donald Trump’s attempt to punish Mexico for illegal Central American immigration and the U.S. attempt to limit use of China’s government-connected Huawei electronics amount to imposing tariffs for political purposes. “We should be concerned these moves could derail the economy. You can see some of that fairly quickly.”

What censorship? Dimon rejects claims by activists that private companies’ refusal to carry payments to ideological and other marginal businesses is part of a political agenda to suppress dissent.

He admits the bank sometimes cuts off customers without telling them why -- and blames the federal Bank Secrecy Act for the lack of transparency: “That needs to be changed.” But he denies there’s a bias: “Some are conservative groups. Some are liberal groups." And some are banned for other reasons.

Should banks, payment networks, or social media ban people with extreme political views? “There are other ways to attack that problem” than outright bans, Dimon said. “People who do political advertising in the U.S. should be U.S. citizens. They should be known” at least to the publishers who carry their ads and the financial institutions who manage their payments, “so they know you are not a [foreign] spy.”

The media: Dimon praised Amazon boss Jeff Bezos’ commitment to national and international coverage since buying the Washington Post. He says regional news companies have had a tough time adjusting. “It’s a competitive business again. Welcome to our world!”

CEOs in public: Since government has a tough time improving itself, industry leaders need to agitate for smart reform: "Business needs to be a little less parochial. What’s good for JPMorgan is good for the U.S.A.”