(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
NEW YORK, April 24 (Reuters Breakingviews) - JPMorgan (JPM.N) is sending its big gun after small bounty. The U.S. mega-bank is deploying global investment banking boss Jeff Urwin to run things from Hong Kong, and with the extra title of chief executive for Asia Pacific. Deploying such a senior banker there may help CEO Jamie Dimon gain ground on regional leaders UBS UBSN.VX and Goldman Sachs (GS.N). But the payoff isn’t entirely clear.
Asia remains solidly third out of the five broad geographic regions mined for investment banking revenue. At $12.4 billion, fees stemming from the region represented only about 15 percent of the industry total globally last year, according to Thomson Reuters data. And JPMorgan gets only a tiny bite of that smallish pie. Its Asia dealmakers brought in $351 million in 2011 - the bank’s lowest figure since 2006 - or roughly 6 percent of its total lucre from advising on mergers and underwriting stocks and bonds.
That left JPMorgan in fourth place in fees, earning less than two-thirds of top-placed UBS. With its market share for the region declining in each of the past four years, there’s certainly a strong argument for some new blood.
Business moguls and statesmen in China and beyond may well infer from Urwin’s presence on the ground that JPMorgan is more serious about its role in Asia. And his experience will serve the bank well in one of the most important sub-sectors of the market: cross-border M&A. It already accounts for around half the deal fees in Asia and may well grow as more western companies tie up with the region’s players.
But global heads generally bring in - and are brought in on - the biggest deals with the biggest fees. For all its continuing promise, Asia remains a fair way off from the epicenter of investment banking. That doesn’t mean JPMorgan or Urwin are making the wrong move. But it does mean he’s bound to find himself repeatedly called on to head back west, where the lion’s share of transactions are done. That means Urwin’s frequent flyer miles will probably grow faster than JPMorgan’s standing in Asian league tables.
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- JPMorgan said on April 24 that Jeff Urwin, its global head of investment banking, is to be based in Hong Kong and take on the additional role of chief executive of the Asia Pacific region. He replaces Gaby Abdelnour, who announced in March he would step down in the summer.
- JPMorgan announcement: link.reuters.com/cex77s
- Reuters: JPMorgan’s Urwin takes Asia Pacific CEO role [ID:nL3E8FO7DE]
- For previous columns by the author, Reuters customers can click on [CURRIE/]
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