JPMorgan's Net Interest Margins Will Be Under Pressure, but Growth Will Be Strong

JPMorgan is arguably the dominant bank in the United States. With leading investment bank, commercial bank, credit card, retail bank, and asset- and wealth-management franchises, it is a force to be reckoned with. The bank's combination of scale, diversification, and sound risk management seems like a simple path to competitive advantage, but few others have been able to execute a similar strategy. Even the best-managed banks are not immune from the occasional stumble, but JPMorgan seems to put all the pieces together in a more cohesive and less error-prone way than its competitors. With the importance of scale and technology only increasing for the banks, we think it will be hard for competitors to catch up.