Bank One Corp hired Goldman Sachs Group Inc to sell its corporate trust unit for as much as US$1 billion, a sale that would be Jamie Dimon's biggest since he became chief executive in 2000, said people familiar with the matter.
Dimon wants to exit a slow-growth business that earned the sixth-biggest US bank about US$25 million last year, less than 1 percent of US$3.3 billion in profit, Keefe, Bruyette & Woods analyst Tom McCandless estimated in a research note. Bidders may include Wells Fargo & Co, US Trust Corp, a unit of Charles Schwab Corp and Bank of New York Co, people familiar said.
Each of those suitors would combine Bank One's US$1 trillion in securities under administration with their existing trust units.
The business provides services for government and corporate debt issuers as well as investors, including relaying interest payments to bondholders.
"You have to have a lot of volume in this business to make it worth your time, and while a trillion dollars sounds like a lot, it isn't when it comes to this,'' said Bob Millen, who helps manage US$1.5 billion at Jensen Investment Management in Portland, Oregon. He owns financial stocks, including State Street Corp, which sold its trust unit four months ago to US Bancorp.
Bank One's business, which generates as much as US$200 million in revenue, may fetch a pretax gain similar to the one State Street received, McCandless wrote. The Chicago-based company could reap as much as US$700 million, or US$0.40 a share, before taxes, according to McCandless.
Bank One spokesman Tom Kelly declined to comment, as did Andrea Rachman, a Goldman Sachs spokeswoman. Bank of New York spokesman Robert Grieves and Schwab spokeswoman Marta Von Loewenfeldt declined comment. Wells Fargo spokesman Larry Haeg did not immediately return messages left on his cellphone and at his home.