Opinion

Felix Salmon

JP Morgan’s reputation plunges

By Felix Salmon
May 23, 2012

JP Morgan Buzz vs. Goldman Sachs.jpg

From a PR perspective, the way that JP Morgan managed to lose more than $2 billion on a bad trade is easily the worst thing to happen to the bank since before the financial crisis. This chart comes from YouGov BrandIndex, which measures consumer’s brand perceptions, and shows that JP Morgan is now held in lower esteem than Goldman Sachs — quite possibly, for the first time ever.

The plunge in JP Morgan’s “buzz score”, of a good 20 points, is huge: the only comparable fall was the release of the Abacus complaint against Goldman in April 2010.

And just as in that case, JP Morgan’s reputation will recover, and it will surely return to the “meh” range that it’s been stuck in since the crisis — in the shallow end of negative territory.

Still, it’s interesting to note that JP Morgan’s latest score, of -32, is exactly the same level that Goldman fell to in the wake of the Greg Smith op-ed. That op-ed coincided with a major shake-up in Goldman’s PR department. My guess is that JP Morgan’s PR department, by contrast, is much more secure. They haven’t been able to make the bank popular, of course. But they’ve definitely consistently outperformed Goldman. At least until now.

Comments
3 comments so far | RSS Comments RSS

Isn’t this plunge arguably more disastrous for JPM which has a retail facing presence whereas GS doesn’t? I’m not predicting a run on JPM or anything like that but bad PR could decelerate their retail deposit growth (which would lead to lower excess deposits and even more desperate bets to chase returns?).

Posted by GregHao | Report as abusive
 

“JP Morgan’s reputation will recover, and it will surely return to the “meh” range that it’s been stuck in since the crisis — in the shallow end of negative territory.” (FS)

Probably, maybe – but JPM’s still locked-in to the position, which apparently continues to bleed big. Who knows how far this thing runs? JPM needs an exit strategy – like desperately.

Posted by MrRFox | Report as abusive
 

The PR Verdict: C (Distinctly OK) for JP Morgan Chase. Jamie Dimon’s early tactic of taking responsibility was not just the right thing to do, but good PR. The next step is stanching the reputation hemorrhage with a plan for restitution or better business practices, which could help rebuild customer confidence.

Posted by PRVerdict | Report as abusive
 

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