Amend: Fitch Affirms JP Morgan Chase Following Bank One Merger; Raises Individual Rating.

NEW YORK -- Today, Fitch Ratings affirmed and removed from Rating Watch Positive the 'A+' long-term debt ratings for JPMorgan Chase & Co. (JPMC) following the completion of its merger with Bank One Corporation (ONE) in an all-stock transaction. The Rating Outlook is Positive. A complete list of ratings is provided at the end of this release.

--Enhanced Franchise;

--Solid Capital and Liquidity, combined with Recent Improvements in Earnings;

--Litigation Uncertainty Remains;

--Integration Challenges Noted.

The enhanced JPMC franchise is now broader, deeper and potentially more powerful. The Positive Outlook anticipates the strong possibility that JPMC will, over the next twelve to eighteen months, be able to harness the power of this franchise to effectively deal with business challenges, most particularly the litigation overhang.

In Fitch's view, the benefit of this transaction is the enhancement of both scale and diversity. The combined organization has assets of over $1 trillion and tangible equity of approximately $53 billion. JPMC's broad franchise, which already benefits from significant business diversity, will become more balanced through the addition of ONE's businesses, predominantly its strong presence in credit cards, consumer lending and middle market commercial banking. In addition, JPMC's consumer branch network, heretofore limited to the New York tri-state area and Texas, will benefit from the substantial geographic diversity of ONE's retail footprint which spans 14 states. This transaction is clearly consistent with JPMC's previously expressed interest in building its retail and middle market franchise.

Management has indicated that the combined organization will remain strongly capitalized, with capital targets significantly above regulatory-required levels. In addition, recent financial performance of both organizations has been trending positively, largely due to improved asset quality and more robust capital markets.

The combined organization faces many challenges. Perhaps the greatest risk remains the uncertainty associated with the extensive litigation facing JPMC, much of which has arisen from the firm's business with Enron. This is considered a material risk. ONE brings with it certain litigation risks as well, although not likely to be on the scale of the Enron-related matters. The integration of these two distinctly different franchises and cultures also presents significant new challenges. The past experience of both companies in merger and systems integration mitigates many concerns. An additional challenge will be the private equity business as both firms have suffered from weakness. While both have taken actions to improve their respective businesses, it continues as an underperformer.

The Positive Outlook speaks to Fitch's view that JPMC should be in a considerably stronger position to address potentially large litigation matters over the medium term, through continued improvement in profitability, allowing significant capital and/or reserve build. Future profitability will clearly be influenced by market forces and, importantly, retention of key personnel, particularly in the Investment Bank. While the settlement of all outstanding litigation is likely to take many years, it is our expectation that more clarity will evolve over the medium term along with JPMC's added capacity to absorb the potential impact. Should these factors evolve positively; a rating upgrade will be considered.

Ratings affirmed:

JP Morgan Chase & Co.

-- Short-term debt 'F1';

-- Long-term senior debt 'A+';

-- Subordinated debt 'A';

-- Preferred 'A'.

JPMorgan Chase Bank

-- Short-term deposits 'F1+';

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

Chase Manhattan Bank USA, NA

-- Short-term deposits 'F1+';

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

Chase Capital I - VIII

-- Preferred 'A'.

JPM Capital Trust I and II

-- Preferred 'A'.

JPMorgan Chase Capital IX and X

-- Preferred 'A'.

Bank One Corporation

-- Individual withdrawn; formerly 'B';

-- Short-term debt 'F1';

-- Long-term senior debt 'A+';

-- Subordinated debt 'A';

-- Preferred 'A'.

Bank One, NA (Chicago)

-- Individual 'B';

-- Short-term deposits 'F1+'

-- Short-term debt 'F1+';

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

Bank One, NA (Columbus)

-- Individual 'B';

-- Short-term deposits 'F1+'

-- Short-term debt 'F1+';

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

Bank One Delaware, NA

-- Individual 'B';

-- Short-term deposits 'F1+'

-- Short-term debt 'F1+';

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

Bank One, West Virginia, NA

-- Individual 'B';

-- Short-term deposits 'F1+'

-- Short-term debt 'F1+';

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

Banc One Financial Corp.

-- Short-term debt 'F1';

First Chicago NBD Capital I

-- Preferred 'A'.

-- The Rating Outlook is Positive for all ratings.

Ratings upgraded:

JP Morgan Chase & Co.

-- Individual to 'B' from 'B/C'.

JPMorgan Chase Bank

-- Individual to 'B' from 'B/C';

-- Short-term debt to 'F1+' from 'F1'.

Chase Manhattan Bank USA, NA

-- Individual to 'B' from 'B/C';

-- Short-term debt to 'F1+' from 'F1'.

-- The Rating Outlook is Positive for all ratings.

The following are inactive affiliates with rated issues that are being affirmed and removed from Rating Watch Positive:

Bank One Texas, NA

-- Subordinated 'A'.

Chase Manhattan Bank

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

Chase Manhattan Corporation 

-- Long-term senior debt 'A+';

-- Subordinated 'A';

-- Preferred 'A'.

Chemical Bank

-- Subordinated debt 'A'.

Chemical Banking Corp.

-- Long-term senior debt 'A+';

-- Subordinated debt 'A'.

JP Morgan & Co., Inc.

-- Long-term senior debt 'A+';

-- Subordinated 'A';

-- Preferred 'A'.

Morgan Guaranty Trust Company of New York

-- Long-term deposits 'AA-';

-- Long-term senior debt 'A+';

-- Subordinated 'A'.

The following Ratings are Withdrawn with no issues outstanding

American Residential Mortgage Corp.

-- Long-term senior debt 'A+'.

Manufacturers Hanover Corp.

-- Long-term senior debt 'A+'.