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Bank One's


second consecutive quarterly decline in revenue might help explain why the nation's sixth-largest bank has agreed to be acquired by

J.P. Morgan Chase



The bank Tuesday reported fourth quarter revenue of $4.11 billion, down 2% compared to a year ago. For the year, revenue at the Chicago-based bank sank by 3% to $16 billion compared to 2002.

Much of the revenue decline is because of a 5% drop in net interest income, which represents the money a bank makes from the investments that fuel its lending operation. Last year, Bank One generated $8 billion in net interest income, compared to $8.1 billion in 2002.

The irony is that last year revenue soared at most banks as low interest rates during the first half of the year fueled a surge in consumer borrowing, especially for mortgages.

At Citigroup, the nation's largest financial services firm, full-year revenue rose 8.5% to $77.4 billion -- a new record.

Bank of America


, the third-largest bank, saw a 10% rise in revenue to $37.9 billion.

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Wells Fargo


, the fourth-largest bank, reported a 12% increase in revenue to $28.4 billion. And New Jersey-based regional bank

Commerce Bank


reported $1 billion in revenue, a 31% gain over the prior year.

Sluggish revenue growth at Bank One has been the major chink in the armor of Jamie Dimon, Wall Street's favorite bank executive. Dimon, currently Bank One's chief executive officer, will become president of J.P. Morgan Chase after the merger and is slated to take over the top job at the nation's No. 2 bank in 2006.

Bank One critics say Dimon, who gets credit for cutting costs at the bank, has been unable to generate any organic revenue growth in the bank's main lines of business.

Indeed, the sluggish performance at Bank One cut across all divisions in 2002. Revenue from banking fees and commissions were virtually unchanged at $1.76 billion. Revenue from service charges on deposits was up a modest 5% to $1.67 billion.

Even Bank One's prized credit card business, the division that J.P. Morgan is said to have most coveted in the $59 billion mega-merger, failed to impress. For the year, card revenue came in at $3.7 billion, a decline of 2%. By comparison, Citigroup's credit card division registered a 7% full-year gain on revenue to $14.7 billion.

But there are signs that Bank One's credit card division may be turning the corner. In the fourth quarter, revenue rose 4% from a year ago to a little more than $1 billion. That's a big improvement over the third quarter, when card revenue was flat compared to the year-earlier period.

The card division also generated $347 in net income in the fourth quarter, an 8% gain over a year ago. The card division accounted for just over a third of Bank One's $978 million in net income in the quarter.

For J.P. Morgan Chase, which has a sizeable credit card business of its own, a revenue revival in Bank One's card business may be just enough to justify the 14% premium it plans to pay its shareholders.