JPMorgan Brings `Full Force' to China in Major Market Expansion
(Bloomberg) -- JPMorgan Chase & Co. is bringing its global heft to China.
The New York-based bank on Monday named Mark Leung, its global co-head for equities, as new China chief executive officer. The lender is also seeking to create a securities company in China and plans to take a majority stake in its local fund management joint venture, JPMorgan said in an emailed statement.
“Our investment in China is a commitment to bring the full force of JPMorgan Chase and our resources to the country,” CEO Jamie Dimon said in the statement. “We will hire people, lend to businesses, support the development of markets and strengthen communities through philanthropic initiatives.”
The moves follow Dimon’s visit to Beijing last week where he expressed hope that mounting trade tensions won’t derail the U.S. bank’s plans to expand in the world’s second-largest economy. UBS Group AG and Nomura Holdings Inc. have also sought to deepen relationships in the country after China pledged to open its $42 trillion financial sector to foreign firms.
Leung, a 21-year JPMorgan veteran, will relinquish his global role to be China CEO and Jason Sippel will become sole head of the equities operation. JPMorgan hasn’t appointed a China CEO since Zili Shao stepped down to become the bank’s vice chairman in April 2014.
Leung started his career in rates derivatives trading and has held trading roles in emerging markets, credit hybrids and equity derivatives. David Li, the current senior country officer for China, is taking on the additional role of vice chairman of global banking.
Separately, JPMorgan’s corporate and investment bank has submitted an application to the China Securities Regulatory Commission to establish a securities company, in which it would hold a 51 percent stake. It aims to boost this holding to 100 percent when regulations permit such an increase.
JPMorgan is also in talks to increase its joint venture stake in China International Fund Management Co. to a majority interest, subject to agreement with its partner and the relevant authorities. UBS and Nomura were the first to seek permission to take 51 percent stakes in local ventures under loosened rules announced last month.
Dimon, 62, said last week that JPMorgan is “gearing up" to help companies do cross-border business in China and doesn’t worry about short-term goals for profit and revenue in the country. He reiterated the bank’s goal to achieve 100 percent ownership of a Chinese brokerage operation, and to get all the licenses to do the same business as the bank does in the U.S.
Under proposed Chinese rules, foreign securities firms will be allowed to apply for broader licenses and get into businesses such as nationwide securities trading, an area only Goldman Sachs Group Inc. and UBS JVs are currently involved in. The newly established securities ventures can apply for four different licenses once they’re set up and another two permits a year later. This would help new players like JPMorgan narrow the gap with Goldman and UBS.
JPMorgan decided more than a year ago to exit a minority-owned Chinese investment-banking joint venture, with Dimon highlighting that such setups tend to have corporate governance shortcomings.
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