As part of its efforts to reorganize the investment banking operations in China, JPMorgan Chase & Co. JPM revealed its plans of increasing the headcount of its Chinese investment banking team by nearly 40-50%. The target is expected to be achieved within the next two to three years.
This move by the bank, to expand its China investment-banking operations, comes as it seeks to increase focus on technology companies, with an investment-banking coverage in the country. Recently, there is an increasing number of Chinese technology companies that are well positioned to be valued at hundreds of billions of dollars in a few years and hence, are engaged in fundraising through public and private markets.
John Hall, co-head of JPMorgan’s investment banking coverage for the Asia Pacific said that the investment-banking industry groups that traditionally existed do not match up to the new-economy technology companies in China.
Murli Maiya, another co-head of JPMorgan’s investment banking for the Asia Pacific stated, “China is the country that just has leapfrogged, surpassing many things that happened in the West for the last decade.”
Maiya added, “The new economy in China is newer than and very different from many economies anywhere in the West.”
Hence, in order to cater to such new technology companies, JPMorgan is changing the structure of its investment banking team in China. It is trying to reorganize and modify the categorization of its banking team.
In the past few weeks, it has created nearly seven new groups, which are reinforced by the fast-growing technology sector.
Notably, JPMorgan has also been planning to launch a joint-venture brokerage firm in China. It aims at holding 51% stake of the venture and, for this, it has applied to the Chinese regulators.
The bank’s efforts to expand into new markets, focus on card business, higher interest rates and rising loan demand are expected to continue to benefit its financials. Shares of JPMorgan have gained 16.7% in the past year, outperforming the industry’s rally of 8.5%.
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Currently, JPMorgan carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the finance space are LPL Financial Holdings Inc. LPLA, The Charles Schwab Corporation SCHW and M&T Bank Corporation MTB.
Over the last 60 days, LPL Financial witnessed an upward earnings estimate revision of 22.4% for the current year. Its share price has increased 58.7% in the past 12 months. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Schwab’s earnings estimates for the current year have been marginally revised upward over the past 60 days. Its shares have gained 23.8% in the past 12 months. It currently has a Zacks Rank #2 (Buy).
Over the last 30 days, M&T Bank also witnessed a marginal upward earnings estimate revision for the current year. Its share price has increased 5.2% in the past 12 months. It also has a Zacks Rank of 2.
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