JPMorgan: Going all out in Brazil
JPMorgan has backed its subsidiary with balance sheet and resources, and although the country’s economic growth has slowed the bank’s headcount has continued to rise. CEO Cláudio Berquó says that rather than becoming over-committed, the bank’s new capabilities are enabling it to adapt and build new business.
In October 2011, JPMorgan committed an extra R$1 billion ($493.4 million) to the balance sheet of its Brazilian subsidiary. One year on and the bank’s Brazilian chief executive, Cláudio Berquó, wants more – not just a bigger balance sheet but also more resources. "We have grown from 300 people to close to 1,000 in the past few years," he says. "We have approximately 100 expatriates working throughout our Brazil offices and we keep requesting additional investments and resources. The way I see it, as long as the firm and Brazil keep doing well there should be a constant flow of investment."
The balance sheet has been set to work as the bank sought to enter the local debenture market. Bradesco and Itaú dominate this market, and Berquó says that JPMorgan will never attempt to compete with the locals head-on. Rather, it is transacting on specific deals to deepen local relationships and has now executed three deals worth $220 million, according to data from Dealogic. In the Brazilian domestic market most of the local deals require a firm commitment to hold the paper if the bank cannot place it into the market, and, in fact, many of these are not even offered to investors but held by the banks.