More than 100,000 small businesses in the Northeast will soon find their money in new -- and bigger -- hands.
In an effort to grow its small-business customer base, JPMorgan Chase has signed on to acquire $15 billion worth of The Bank of New York's small-business, middle-market and consumer banking operations in the area. In the deal, announced last week, The Bank of New York will receive JPMorgan's corporate-trust businesses and a cash payment of $150 million.
Chase's larger size, said spokesman Tom Kelly, will allow small-business owners to access three times as many branch locations and five times as many ATMs. All told, the deal will create 338 new Chase bank branches that cater to 600,000 households and 2,000 middle-market organizations.
"Our new customers have had great bankers already," Kelly said. "But we have a greater emphasis on small businesses and more resources."
The new customers, Kelly said, will have access to Chase products and services, including investment and cash-management tools, that were originally created for big-business customers and have been retooled for small businesses. With total corporate assets of $1.2 trillion, Chase has some 800,000 total small-business customers.
Affected Bank of New York customers will have to wait until 2007 to make the switch to Chase's banking technology and brand. Chase is expecting Bank of New York customers to be able to access Chase ATMs in late 2006, however.
Company officials describe the pending switchover as a "non-event" that will not cause disruption to customers.
Many small-business owners may also have their outstanding loans maintained under a new roof. Chase also acquired $8 billion in small-business, consumer and middle-market loan balances. With the largest branch network in New York, Chase's new acquisitions will give it the largest branch presence in on Long Island and in New York's northern suburbs as well, according to the company.