Chillin' out till it needs to be funded
In a late late awakening, with Mike Cavanagh of WaMu and Bear Stearns fame grabbing the chair in fixed income, JP Morgan is finally ready to roll overseas. Currently, Jamie Dimon crossed himself out of a few dinners and let himself up for the job of running JPM again, renewing his allegiances to a global mandate. Unable to work with local regulators and probably worried by the lack of growth in domestic retail business, JP Morgan has to work harder than most. It has to crawl out of its corners in UK and Western Europe and compete all over again with Citi that has 60% of its business from global locations, being a dominating presence in many growth driven franchises including India, Brazil and even China.
The developed markets may not bring much new business. However, fixed income franchises are global as also the new investment banking list of probables that scour global investors for much of the new growth. Apart from the restructuring at the top, local teams in India, China and Brazil/Latin America would also need investment approvals and local partnerships with governments to roll out a significant retail strategy in the highly regulated national markets in each case. Also, for successful global corporations a balance between Command and control centralization and a loose federation is essential to establish that presence and grow as a whole, both BoA and ML serving notice of the same in their experience of the local markets and their own unwinding in the earlier edition.
Jamie Dimon is of course ready for the challenge:
“We have got to invest locally, look at clients globally and look at new markets,” he said in the interview. “We are going to get the whole company behind it.”
Mr. Dimon, who spent the last two weeks hopscotching across China, India and Russia, had been laying the groundwork for international expansion for some time. A few years ago, he assigned two top lieutenants to scout out potential consumer banking opportunities overseas. He created a network of global advisers, including Tony Blair, the former British prime minister, and established a partnership with a buyout firm started by several former Citigroup colleagues to hunt for overseas acquisitions.
The global credit crisis postponed those plans.
The NYT original is quite the spinmaster and a good sort too.