Wall Street bank J.P. Morgan Chase & Co aims to hire up to 500 people in Asia next year and wants to generate 20 percent of its global wholesale banking revenue from the region, up from 15 percent now, Asia Pacific CEO Gaby Abdelnour said.
J. P Morgan, which hired 100 people last year in Asia, plans to develop corporate banking business to benefit from the regions' booming IPO and M&A market, Abdelnour told Reuters Insider.
"Building a global corporate bank takes years ... this may take us seven, five to 10 years," he said, adding that the company will probably need to have 3,000 people in the corporate banking business eventually.
By focusing on corporate, rather than retail banking, J. P Morgan is taking a different strategy from rivals such as HSBC and Citigroup in expanding in Asia, where the US bank's business has been growing more than 15 percent annually on average during the past five years, Abdelnour said.
"Many people tell me 'Why don't you just start competing in retail?' It's like asking an Indian bank, a Chinese bank to go to New York City and start opening up branches on every corner to compete with Chase and Citi and Bank of America."
Abdelnour sees growing M&A businesses in Asia, where cash-rich Chinese, Indian and Japanese companies are stepping up overseas acquisitions. Currently, less than a quarter of J. P Morgan's investment banking business comes from M&A.
J. P Morgan is also seeing huge opportunities from wider global use of the Chinese currency, as it aims to become a leading yuan clearing bank and also win businesses to underwrite yuan-denominated bonds and stocks.
The Chinese government is developing Hong Kong into an offshore yuan center to promote international use of its currency, so as to reduce the country's reliance on the US dollar in international trade and investment.
"Eventually, more and more transactions will happen in the RMB so we're gearing up," Abdelnour said, referring to the yuan, also known as the renminbi.
"We're already seeing bonds issued in RMB. We're doing that. You will see more and more IPOs listed in Hong Kong, done in RMB. Trade, FX, all of that will be in RMB." J. P Morgan also plans to expand its private banking business in countries such as China and India, part of a strategy to broaden banking services in those emerging markets.
"We are only a wholesale bank in Asia," Abdelnour said, adding that Asia only accounts for about 15 percent of J. P Morgan's wholesale business globally. "Ultimately, I'd like to get it to more than 20 percent.