Wednesday, January 16, 2008

JPMorgan Surpasses Citigroup in Market Capitalization (Update1)

By Elizabeth Hester

Jan. 16 (Bloomberg) -- JPMorgan Chase & Co. surpassed Citigroup Inc. to become the second-biggest U.S. bank by market value after taking smaller-than-expected writedowns on subprime- related assets.

JPMorgan rose $2.26, or 5.8 percent, to $41.43 in New York Stock Exchange composite trading today, lifting the firm's market value to $139.5 billion. Citigroup's market value fell to $131.1 billion as its shares dropped 2.6 percent. Both lag behind Charlotte, North Carolina-based Bank of America Corp., which has a market capitalization of $171.7 billion.

Jamie Dimon, chief executive officer at JPMorgan, reported $1.3 billion in subprime related writedowns, compared with the $18.1 billion Citigroup, his former employer, reported yesterday. JPMorgan has lost 14 percent in market value in the past 12 months, compared with a 52 percent drop at Citigroup.

``Jamie Dimon does a good job as a visionary and seems to have a good handle on the company and its risks,'' said Thane Bublitz, a senior equity research analyst at Thrivent Financial for Lutherans in Appleton, Wisconsin. ``They've been executing better.'' Thrivent has about $74.4 billion in assets under management and owns shares of both banks.

Citigroup still dwarfs JPMorgan by assets, with $2.18 trillion compared with JPMorgan's $1.56 trillion. Bank of America, which reports fourth-quarter earnings Jan. 22, had $1.58 trillion in assets at the end of the third quarter.

JPMorgan shares now trade at 1.13 times book value, compared with 1.15 at Citigroup and 1.27 at Bank of America.

Each JPMorgan employee generated about $85,046 in net income and $395,047 in net revenue last year, compared with $9,645 and $217,861, respectively, at Citigroup, according to data compiled by Bloomberg. JPMorgan had 180,667 employees at the end of last year, while Citigroup had 375,000.

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