JPMorgan to launch global corporate bank unit

JPMorgan Chase is launching a global business aimed at selling loans and commercial banking services to multinational corporations, pitting the US bank against Citigroup and HSBC.

The creation of a global corporate banking unit, which has not been announced, will see JPMorgan invest substantial resources and hire hundreds of bankers in an effort to win a bigger slice of international business.

People close to the situation said that the new business, which will sell products ranging from loans and commodities trading to cash management services, would initially focus on fast-growing economies such as China, India and Brazil.

The UK, Germany and Switzerland will also be in the first wave of countries to be targeted, with a view to expanding the unit’s reach to the rest of the world over the years.

The move by JPMorgan is emblematic of the changes in global banking following the turmoil and could open up a market that has traditionally been dominated by Citi and HSBC.

JPMorgan executives said that the launch was aimed at reducing reliance on the slow-
growing US economy and taking advantage of a weakened Citi. The US accounts for about three-quarters of JPMorgan’s revenues.

Greg Guyett, JPMorgan’s head of Japan who will move to London to lead the new unit, told the Financial Times: “We are doing this now for a couple of reasons . . . to balance our growth and increase the portion of our revenues that comes from outside the US and from emerging markets in particular; and because, after the crisis, a number of our competitors are challenged.”

He said that JPMorgan would invest more than $100m in building the corporate bank, which would have 300 bankers.

JPMorgan’s executives believe the company’s global investment banking network will provide it with valuable access to top executives, while its financial strength will enable it to compete in price and quality.

Mr Guyett said JPMorgan would use its balance sheet to lend to international corporate clients. Loans are the entry point for banks wanting to win business from international companies.

“The rationale for growing this business is compelling,” wrote Jes Staley, head of JPMorgan’s investment bank, and Heidi Miller, who runs its treasury and securities services business, in a recent note to staff.

“Increasingly we are hearing from our clients that they want more corporate bank services in more of the international locations where they operate.”

Separately, JPMorgan on Thursday announced that Steve Black, the former co-head of the investment bank, would become a vice-chairman. Mr Black had become executive chairman of the investment bank in September when JPMorgan ousted Bill Winters, the other co-head, and moved Mr Staley to run the unit.