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View the Euromoney 25 |
Of all the global corporate and investment banks, Jamie Dimon’s JPMorgan remains the one whose overall performance is the yardstick for rivals. At more than $75 billion for the first three quarters of 2017, its revenues surpass all others, as do its profits of nearly $27 billion.
Its corporate and investment banking division vies for top spot with Bank of America Merrill Lynch and Citi in both profits and revenue. It makes more money in fixed income, currencies and commodities than anyone else, even when that sector is experiencing some of its toughest times.
Such has been the story pretty much consistently since the global financial crisis. But while strength in its home market is natural, it is the bank’s improvement in Europe that has been one of the most striking aspects of its recent performance. It topped the regional investment bank league tables published by Coalition in 2016 and the first half of 2017, ranking first in FICC, equities and investment banking.
In each of the last two years, the bank has ranked top in EMEA equity capital markets bookrunners, according to Dealogic. In 2017, its market share was 8.65%, ahead of closest competitor Morgan Stanley, with 7.36%.
It is a similar story in debt capital markets, where the bank ranked top in European high yield after having just scraped into the top five in 2016. In all European DCM, it ranked third, up from fourth the previous year. In M&A, it was practically neck-and-neck with Goldman Sachs for completed deals with any European involvement, compared with being fully five percentage points of market share off the top in 2015.
Viswas Raghavan is head of EMEA banking and ascended from deputy chief executive of the region to the CEO position when Daniel Pinto, the bank’s overall corporate and investment bank head, added the role of global head of technology and operations to his portfolio.
For Raghavan, the results in EMEA have come from ensuring that every part of the offering is working.
“The model of just being good in equity and M&A alone doesn’t work – you need to be good in every asset class,” he argues. “It is about a holistic delivery to clients.”
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Jamie Dimon |
This reflects the bank’s long-running effort to beef up its international corporate bank.
Years ago, JPMorgan’s model was to play to its US strengths, following its US clients abroad or focusing on doing everything in dollars for its global clients. Today it is a much more global effort.
That said, it is also the case that there is still work to be done to translate relationships into top performance in all areas. Transaction services remains a case in point.
The bank made more money in 2017 than before in Europe. But it has not had the same impact in European cash management as, say, BAML, which arguably has a weaker client base in the region. And it is rarely spoken of as a leading player in the increasingly important transaction services markets in Asia.
Raghavan notes that another factor in the bank’s relentless push has been the need to remain state-of-the-art when it comes to technology: “An important consideration is that the cost of doing business is getting steeper, whether that is capital or regulation like Mifid or investment in cyber. It costs a lot of money to remain state-of-the-art, but those who fail to do that will be overtaken.”
Nowhere is that emphasis more evident than in the areas presided over by David Hudson, the bank’s head of markets execution.
Hudson’s role is to work out how JPMorgan’s investment bank can be savvier when it comes to technology. It is not for nothing that he is considered to be the bank’s ultimate disruptor.
He moved into his current position after a stint as CFO for global markets and is unusually senior for an investment bank technology innovation role, reporting to Pinto.
Hudson has helped focus the bank’s attention on tech solutions that have a practical benefit to clients because they emanate from ideas generated in businesses that are close to those clients.
Raghavan puts a similar priority top of his list for 2018 too: ensuring that the bank avoids complacency and keeps the client at the centre of what it does.
It is an approach that seems to be bearing fruit in the bank’s primary markets businesses and is allowing it to hold steady in secondary markets franchises even as volatility remains depressed.
When those conditions change, the job for rivals will become that bit harder.
