JPMorgan restructures investment-banking team in China

JPMorgan Chase & Co is restructuring its China investment banking team in anticipation of regulatory changes and the potential for increased deal flows.

Traditionally, investment banking teams are assigned to sector groups such as healthcare and industrials. However, JPMorgan will be changing this. John Hall, JPMorgan’s Co-Head of Investment Banking for Asia Pacific is of the opinion traditional investment banking industry groups no longer “align well.”

In recent weeks, the Wall Street banking titan has created seven new groups centred on the technology sector, as the bank gears up to cater to so-called new economy companies in China.

The seven new groups include financial services and technology, covering blockchain and mobile-banking clients, and new mobility including bike-sharing companies, as the banking giant aims to increase its investment banking coverage of Chinese technology companies.

These so-called new-economy companies (or unicorns) have already kept bankers busy in recent months raising billions of dollars through private and public markets and are on track to be worth hundreds of billions of dollars in the next few years.

“China is the country that just has leapfrogged, surpassing many things that happened in the West for the last decade,” said Murli Maiya, Co-Head of Investment Banking for Asia Pacific at JPMorgan.

“The new economy in China is newer than and very different from many economies anywhere in the West,” he added.

To handle the anticipated increase in business, the bank plans to enlarge its Chinese investment-banking team, with Reuters reporting it could expand the team by 40-50% over the next two to three years.

JPMorgan applied to Chinese regulators last month to set up an onshore joint-venture brokerage. If the application is approved by the Chinese regulatory authorities it is likely the banks recent China investment banking restructuring and expansion plans will serve it well.

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All figures correct as at 31.12.2019.