Goldman says that JPMorgan would be worth as much as 25% more if it were split into different pieces. Goldman advocates a “complete breakup” of the nation’s largest bank, and says the boost in returns from a split would far out weigh the synergies that JPMorgan claims it gets from its current size.
In a report released on Monday, Goldman’s lead banking analyst said that JPMorgan could be broken up into four parts. The biggest of the pieces would include the bank’s branch network, which Goldman says could be worth over $100 billion on its own. JPMorgan’s investment bank would be nearly as large, followed by its commercial bank and an asset management company.
Banking reform advocates have long called for the nation’s biggest banks to be broken up. The so-called too big to fail problem has received plenty of attention since the financial crisis. Many believe the government in late 2008 was essentially forced to bail out the nation’s banks in order to avoid a deeper recession. Some think new regulations have addressed the too big to fail problem. Others, including some prominent bankers, think big bank break ups would make sense. Sandy Weill, who was the CEO of Citigroup when it became the first of the nation’s modern mega-banks, now says he believes breaking up the large banks makes sense.