NEW YORK — JPMorgan Chase & Co. named Jes Staley the head of its investment bank, a move that puts Staley in a position to become the new CEO should the bank's current chief, Jamie Dimon, leave or retire unexpectedly.
JPMorgan said Tuesday that Staley, 53, is taking over leadership of the investment bank – one of JPMorgan's most important divisions and largest sources of revenues – from co-CEOs Steve Black and Bill Winters. Staley has been head of asset management at JPMorgan.
A JPMorgan executive told The Associated Press that Staley is one of the main candidates to succeed Dimon should he leave in the near future. Dimon, also 53, has said previously he has no plans to retire early, the executive said, who spoke on condition of anonymity because he was not authorized to speak publicly on the matter.
Company spokesman Brian Marchiony declined to comment.
Staley will report to Black, 57, who will become the executive chairman of the investment bank, and remain in that position through the end of 2010 after turning over day-to-day oversight of the division to Staley.
Winters, 48, is leaving the company. JPMorgan did not disclose his plans.
Winters and Black helped oversee the investment bank through one of the roughest patches in the financial sector since the Great Depression. As the credit crisis has eased, the division has again thrived.
Charles Murphy, a professor of finance at New York University's Stern School of Business, said banks have become very aware following the credit crisis and financial turmoil of the past year of the need to groom potential successors for their CEOs. This provides continuity and confidence for employees and investors to know who would step in and replace the CEO should something happen, Murphy said.
"In the unforeseen event Dimon is not at JPMorgan tomorrow, (Dimon) is doing the right thing to identify people he trusts to take his job someday," Murphy said, adding there is no indication that Dimon is going anywhere, anytime soon.
Profits in the investment bank more than tripled to $1.5 billion during the second quarter on higher underwriting fees and gains in its bonds business. Those strong earnings helped propel the company to a $2.72 billion profit during the April-June period, even as loan losses piled up in the more traditional consumer banking operations cutting into profits.
New York-based JPMorgan has been able to take advantage of a decline in competition and its relative strength compared to other banks during the downturn. JPMorgan navigated the economic turmoil as one of the strongest banks in the country, and has already repaid its $25 billion in government bailout money it received last fall at the height of the crisis.
Staley has been at JPMorgan since 1979 and spent 20 years working in the investment bank. Aside from the investment banking and asset management divisions, Staley has also worked in the bank's Latin America division and was one of the founding members of the bank's equities business.
Murphy said rotating Staley from asset management to investment bank roles makes sense because it gives him a broader background should he ever assume CEO responsibilities for the entire bank.
Staley's former role as head of asset management will be taken over by Mary Callahan Erdoes. Erdoes, 42, was formerly in charge of the private bank unit.