JP Morgan's private bank has embarked on an international expansion in a bid to reduce its focus on the United States, expand its Europe footprint and join the battle to tap the ultra-wealthy in emerging markets.
Pablo Garnica, private banking chief for Europe, the Middle East and Africa (EMEA), said the bank had kicked off a hiring spree and is also looking at possible acquisitions.
We don't rule out any opportunistic growth opportunity ... we cannot only rely on aggressive organic growth, Garnica told Reuters in an interview. He added the bank had looked at potential acquisition targets in the UK and continental Europe.
In our plans, international growth is higher than domestic (U.S.) growth, said Garnica, who has headed the Private Bank's EMEA business since January 2008.
In his region alone, Garnica said the bank is targeting a 15 percent increase in headcount among senior, client-facing bankers through recruitment and may look to poach entire teams of experts or regional specialists.
The strategy to globalize the business, which caters to super-rich clients with more than $20 million in investible assets, hinges in part on chasing new wealth being created in emerging markets such as the Middle East, Garnica said.
The financial crisis and recession has slowed corporate activity that creates new millionaires -- such as stock market flotations and buyouts -- to a trickle in the developed world, forcing private banks to look elsewhere for new business.
In Europe and the United States many are relying on capturing market share from rivals by poaching staff and clients, though Garnica noted corporate activity remains robust in some Middle Eastern markets.
The Middle East is our biggest business and it continues to be a region where there is wealth creation. Again we have aggressive plans to grow there, he said.
But the best performing market in 2009 in the EMEA region was the UK, Garnica said, largely on account of London's continuing pre-eminence as a financial center and home base of choice for many of the world's super rich.
JP Morgan Private Bank had $639 billion in client assets at the end of 2009, a 14 percent increase on the previous year.
Most of these assets are held on behalf of U.S. clients, however, as the international private bank division, including EMEA, Asia and Latin America, holds some $150 billion in assets.
The private bank, catering to the ultra wealthy, forms part of JP Morgan's broader wealth business which includes the Private Wealth Management unit, serving more moderately rich U.S. clients with less than $20 million to invest.
The wealth business also includes Bear Stearns' U.S. brokerage, acquired in 2008 as part of the deal to buy out JP Morgan's former Wall Street rival.
The head of Citi Private Bank, part of Citigroup
(Editing by Joel Dimmock and David Holmes)