Payments are an extremely buzzy corner of the financial sector right now, and
Credit Suisse analyst Susan Roth Katzke told clients Friday after a meeting with the bank's management.
Stocks (ticker: JPM) are up nearly 14% so far this year, just behind
the index's gain of 1
In January, it combined the formerly separate business units that handle consumer-to-merchant payments and business transactions into a new wholesale payment.
In February, the bank rolled out a prototype of a digital mint that will be tested in transactions with institutional clients.
What's new. Roth Katzke met with Takis Georgakopoulos, global leader of the new wholesale payment group, and concluded that the bank's management has made it a strategic priority to dominate all aspects, both consumer and business. "
Payments she said, is a business where scale is very important, and notes that JPMorgan is making progress on that front with the integration of internal platforms – a process that is now more than half-finished. Treasury Services is a fragmented market and the bank can get from consolidation.
Looking ahead. With revenue growth of between 4% and 5% and high return on equity, Roth Katze says that JPMorgan's wholesale payment business is "both strategic important and economically justifiable. "
Write to Ben Walsh at ben.walsh @ barrons.com