Jamie Dimon and the Turnaround of Bank One

Jamie Dimon and the Turnaround of Bank One
Case Code: BSTR325
Case Length: 15 Pages
Period: 2000-2003
Pub Date: 2009
Teaching Note: Not Available
Price: Rs.300
Organization: Bank One Corporation
Industry: Banking, Financial Services
Countries: USA
Themes: Leadership & Values, Turnaround strategy
Jamie Dimon and the Turnaround of Bank One
Abstract Case Intro 1 Case Intro 2 Excerpts

"Jamie Dimon is a great manager, but he's not Hercules, able to achieve mythical events."

- Michael Mayo, Equity Analyst, Credit Suisse First Boston(CSFB), in 2001.

"We have been doing the right stuff and we have become a little oasis in the storm."

- Jamie Dimon (Dimon), Chairman and CEO, Bank One Corporation, in 2002.


On January 3, 2003, Jamie Dimon (Dimon), the then Chairman and Chief Executive Officer (CEO) of Chicago-based retail banking and credit card major Bank One Corporation (Bank One), was awarded the 2002 CEO of the year award by Morningstar Inc. (Morningstar). Dimon was recognized with this award for steering Bank One through turbulent times in the financial services industry. On Dimon being given the award, Patrick Dorsey (Dorsey), director, stock analysis, Morningstar, said, "The 2002 winner of Morningstar's CEO of the Year award proves that you don't need a grand strategy to run a great business - you just need to get the basics right. Jamie Dimon has transformed what once was considered one of the most poorly run banks in the country into a solidly profitable firm with a bright future."

Dimon had become well known in the financial services scenario during the late 1980s, for turning around Baltimore-based consumer lending company, Commercial Credit Corp. (Commercial Credit) with Sandy Weill (Weill), a successful entrepreneur in the financial services industry. In view of his impressive record of turning around beleaguered companies, he was appointed as Chairman and CEO of Bank One in March 2000 to resurrect the ailing bank. When Dimon landed at Bank One, he noted that the bank had serious problems. He observed that it had a string of mergers that were not integrated with its existing lines of business.

There was uncontrolled overhead spending coupled with weak loan quality and low employee morale. Moreover, a major chunk of the bank's problems came from First USA Inc. (First USA), the credit card division of the bank, that was characterized by poor customer service and high rates of interest. Dimon also discovered that the accounting and information technology (IT) systems had become outdated and required enhancement to improve accountability, manage profitability, and upgrade the service levels at the bank. Having identified the problems, Dimon chalked out a plan to turnaround the company in 2000. His plan included a straightforward strategy of slashing costs, tightening the standards of lending, and cutting down the number of bank branches. He also aimed to consolidate the IT systems into a single platform to ensure consistency across all its branches...

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