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With new CEO, JPMorgan eyes India expansion

With new CEO, JPMorgan eyes India expansion
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First Published: Thu, Sep 11 2008. 11 16 PM IST

Contact person: JPMorgan India CEO Kalpana Morparia wants to focus on trade finance and cash management and make use of her network. Ashesh Shah / Mint
Contact person: JPMorgan India CEO Kalpana Morparia wants to focus on trade finance and cash management and make use of her network. Ashesh Shah / Mint
Updated: Fri, Sep 12 2008. 11 05 AM IST
Mumbai: US financial services firm JPMorgan Chase and Co. has sought approval from the Reserve Bank of India, or RBI, to open more branches in the country, but has no immediate plans to chase retail customers that other overseas banks are courting.
Contact person: JPMorgan India CEO Kalpana Morparia wants to focus on trade finance and cash management and make use of her network. Ashesh Shah / Mint
JPMorgan has applied to RBI to open four more bank outlets, in addition to the lone branch it has operated for the past decade from the ninth floor of Mafatlal Centre in Nariman Point, Mumbai’s commercial hub.
“We are awaiting the RBI approval,” said Kalpana Morparia, chief executive officer of JPMorgan India Pvt. Ltd, the firm’s Indian arm. “We are not choosy about locations. We will open them wherever the regulator wants us to do.”
Corporate banking is one of the many businesses that JPMorgan India dabbles in, and Morparia, who took over as CEO in the last week of August, does not see it getting into retail banking too soon, although other foreign banks such as Barclays Plc. and Deutsche Bank AG are aggressively chasing individual customers.
Morparia wants to scale up the group’s treasury and securities services, which include derivatives, custody, securities lending and cash management solutions, and the asset management business. “There is huge scope for asset management business in India and we have just started,” she said.
Outside the US, JPMorgan does not have any exposure to retail banking, Morparia said. In India, the financial firm will get into retail banking only when credit bureaus are in place, said Morparia, who moved to JPMorgan from ICICI Bank Ltd, India’s largest private sector lender.
Credit bureaus collate the credit history of individual borrowers and share them with commercial banks. In case of any default, a borrower gets blacklisted and finds it difficult to access fresh loans. India has just one credit bureau and a couple of others are in the process of being set up.
Indian banks rode high on retail credit growth in the past few years as consumers in the world’s second fastest growing major economy borrowed to buy new cars and homes. But banks are now going slow on retail loans economic growth eases and bad loans pile up.
Morparia wants to focus on trade finance and cash management and use the contacts she built with Indian industrial houses over the 33 years that she spent with ICICI Bank. She was joint managing director of ICICI Bank until recently, when she was made vice-chairperson of the group’s insurance, asset management and securities firms.
“Large Indian firms want global coverage. We have the platform and products,” said Morparia.
Apart from heading the firm’s India operations and reporting to Gaby Abdelnour, chairman and CEO of JPMorgan Asia Pacific, Morparia is also part of the group’s New York-based think tank that devises global strategy for the bank. “I am not here only for networking. What I bring to the table is a strategy for India — I want to deepen and widen the coverage,” she said.
Apart from investment banking that includes fixed income securities, mergers and acquisitions and advisory services, institutional brokerage and the bank’s own investments, JPMorgan has a presence in treasury and securities services as well as non-banking finance.
It has already invested $500 million in private equities and high-yield corporate debt and plans to invest another $750 million in private equity deals across Asia.
An ICICI hand taking over the reins at JPMorgan India completes a cycle. The US bank was one of the founding shareholders of ICICI in 1955, when it was started as a corporate lender, and a joint venture partner of ICICI Securities Ltd, a unit set up in 1993. Morparia brokered the deal, but the joint venture ended five years later.
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First Published: Thu, Sep 11 2008. 11 16 PM IST