J.P. Morgan Chase & Co. is seeing a clearer picture of its retail banking future - and it looks a lot like Charles Schwab Corp.

David A. Coulter, a vice chairman and head of global consumer banking at J.P. Morgan Chase, said in an interview Tuesday that the company would continue to improve its online capabilities, including a full-blown launch of account aggregation services, and would work at better integrating the various product lines within its retail operations.

"The online platform is not where it should be yet," Mr. Coulter said.

Chase is now finalizing a review of its myriad consumer businesses, including deposit services, consumer lending, retail brokerage, asset management, and online banking, to come up with a better total offering, he said.

Mr. Coulter joined Chase last summer with the acquisition of the Beacon Group, a New York investment banking boutique he joined shortly after resigning as president of BankAmerica Corp. in 1998. In the 1980s, Mr. Coulter took the lead in brokering BankAmerica's groundbreaking acquisition of Charles Schwab.

The partnership between the commercial bank and the brokerage was dissolved in 1987 after four years, but Mr. Coulter has not forgotten the experience. On Tuesday he expressed admiration for Schwab's business, an integrated set of online brokerage, cash management, and bill payment services.

"Charles Schwab is a great model," Mr. Coulter said. "They are a good example of how the world is changing. Scale is important but not necessarily in terms of branches and people. Scale in brand and infrastructure are the most important."

Mr. Coulter said he has spent the last several months examining Chase's various retail offerings - including its credit card, mortgage, consumer finance, deposit, investment, and online brokerage products. The results of this review are expected within the next couple of weeks, Mr. Coulter said.

One way to mimic Schwab's model, which combines traditional branches with online brokerage services? Mr. Coulter said Chase could expand the use of its 30 existing private banking offices nationwide to be more like Schwab-style brokerage hubs.

Chase is also seeking to carve $90 million of costs out of its retail unit this year by improving coordination among units. "We are process-inefficient," Mr. Coulter said. "We can reduce the cost of correcting errors and do wonders for our bottom line and our revenue stream," he said. And the word-of-mouth advertising would be "phenomenal."

One course of action is that Chase could revamp its retail account offerings. Mr. Coulter said that as an executive at BankAmerica, he tried to develop a product similar to the Schwab One account, which combines cash management and online bill payment, and offers a Visa debit card, unlimited check writing, low commissions and fees on securities trades, and income on cash balances. Schwab One's account minimum, according to its Web site, is $10,000.

"The key to retail is being at the hub of the transaction network," Mr. Coulter said. "But people want their bank to be able to sweep money overnight and they also want access to liquidity. If you're going to be in the retail business, you have to offer both."

"What he's ultimately saying is that if you want to take advantage of cross-selling, you have to get more fully integrated across your retail businesses," said Susan Roth, an analyst at Credit Suisse First Boston. "Account aggregation lets them do that. Is there room for improvement? Yes. This is Step 1."

Mr. Coulter insists that Chase retail is not on the block, as has been rumored widely since the company first announced plans to merge with blue blood investment bank J.P. Morgan. "We have no objectives to sell the business," he said.

Indeed the company continues to make acquisitions of consumer portfolio businesses, especially in cards and mortgages. For example, it recently agreed to buy the subprime mortgage operations of Advanta Corp.

Mr. Coulter said the company continues to look at credit card and mortgage portfolios as they come up for sale. He also indicated that subprime mortgage lending might become a more important business at Chase. "We think it's an important market," he said.

Ultimately, his goal is to increase income from the retail business by the low- to mid-double digits. The consumer operations have been growing at a rate in the mid-single digits in recent years. "We are really looking to put it on another path," Mr. Coulter said.

Ronald Mandle, an analyst at Sanford C. Bernstein & Co., said Mr. Coulter has some time to prove himself. "He'll have a few years to get to his goals."

"The question is whether he can accomplish growth when consumer credit starts to go the other way," said Diane Glossman, an analyst at UBS Warburg.


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