Citi, JPMorgan, Capital One Bid for Chevy Chase

Citigroup, JPMorgan Chase and Capital One are among the final bidders for Chevy Chase Bank, a Bethesda, Maryland, lender, sources familiar with the matter said.

Other banks that looked at Chevy Chase include SunTrust Banks [STI 24.61 -3.68 (-13.01%) ] and BB&T [BBT 23.06 -0.51 (-2.16%) ], one source said.



The bids come as the largest U.S. banks turn their attention to expanding branch networks and amassing pools of low-cost retail deposits after seeing how unreliable capital markets can be when times are tough.

This strategy has already been put into play by JPMorgan, which snapped up banking assets of Washington Mutual from the FDIC for $1.9 billion, and by Wells Fargo [WFC 22.53 -1.87 (-7.67%) ], which trumped a low-ball Citigroup [C 4.71 -1.69 (-26.39%) ] bid to take over East Coast banking giant Wachovia.

Even securities giants Goldman Sachs [GS 52.00 -3.18 (-5.76%) ] and Morgan Stanley [MS 9.20 -1.05 (-10.24%) ] have become banks and joined the hunt for deposits.

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Chevy Chase has $11.4 billion of deposits and 292 branches, according to the Federal Deposit Insurance Corp website.

"The key thing with that bank is that the asset side is not very attractive, but the deposit side is incredibly valuable because it is in Washington, D.C.," the source said.

Chevy Chase was founded in 1969 by Chairman and Chief Executive B. Francis Saul II. It opened its first branch in a trailer on Connecticut Avenue in Chevy Chase, Maryland.

Citi, JPMorgan [JPM 23.38 -5.09 (-17.88%) ] and SunTrust declined to comment. BB&T, Capital One [COF 25.19 -1.31 (-4.94%) ] and Chevy Chase were not immediately available.
Copyright 2008 Reuters