Fitch Affirms JP Morgan Chase & Co; Downgrades JPMorgan Chase Bank

Business Wire, May 17, 2002

Business Editors

NEW YORK--(BUSINESS WIRE)--May 17, 2002

Fitch Ratings has affirmed ratings for JP Morgan Chase & Co. ('AA-', Negative Rating Outlook) and downgraded the long-term debt ratings of JPMorgan Chase Bank to 'AA-' from 'AA', maintaining the Negative Rating Outlook. JPMorgan Chase Bank's short-term debt rating of 'F1+, short-term deposit rating of F1+, long-term deposit rating of 'AA' and individual rating of 'B' have been affirmed. All ratings are listed at the conclusion of this release.

The rating action results in the debt ratings of JPMorgan Chase Bank being aligned with those of its parent company, which is consistent with Fitch's approach to investment grade U.S. banking companies. Increasingly, JP Morgan Chase & Co.'s (JPMC) various business activities and associated risks transcend legal entity lines. Further, many of JPMC's current challenges and risks arise from activities conducted at the bank. Chief among these are credit costs and litigation risks.

Fitch is maintaining the Negative Rating Outlook on JPMC and its subsidiaries. JPMC's core businesses continue to face many challenges, which is reflected in the company's financial performance. A lower level of global activity in its investment banking businesses, weak equity markets, and continued deterioration in the corporate credit quality of its borrowers remain constraints on the firm's financial performance. Litigation risk, while unquantifiable, is another significant factor in the Negative Outlook.

Despite the challenges summarized above, the 'AA-' rating indicates a company of very high credit quality with very strong capacity for timely payment of financial commitments. This strength derives from JPMC's breadth of franchise and diversification of revenue, prudent capital and liquidity management and focus on expense efficiency. JPMC's retail and treasury services businesses exhibit solid financial performance and, many of the corporate and investment banking businesses, particularly following the efficiency initiatives taken in the past eighteen months, should be poised to do considerably better when the economy and the capital markets turn up.

JP Morgan Chase & Co.

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

JPMorgan Chase Bank

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

Chase Manhattan Bank USA, NA

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

Chase Manhattan Bank of Canada

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

Chase Capital I through VIII

-- Trust preferred affirmed at 'A+'.

Chase Trust Bank (Japan)

-- Ratings withdrawn.

JPM Capital Trust I and II

-- Preferred stock affirmed at 'A+'.

JPMorgan Chase Capital IX and X

-- Preferred affirmed at 'A+'.

Inactive affiliates with rated issues outstanding:

American Residential Mortgage Corp

-- Long-term senior debt affirmed at 'AA-'.

Chase Manhattan Bank

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

Chase Manhattan Corporation

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

Chase Preferred Capital Corp

-- Preferred stock 'AA-' withdrawn.

Chemical Bank

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

Chemical Banking Corp

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.

JP Morgan & Co., Inc.

-- Short-term deposits affirmed at 'F1+';

-- Short-term debt affirmed at 'F1+';

-- Long-term deposits affirmed at 'AA';

-- Long-term senior debt downgraded to 'AA-' from 'AA';

-- Subordinated debt downgraded to 'A+' from 'AA-';

-- Rating Outlook Negative.