JP Morgan said its business in China will maintain robust growth, despite gloomy prospects for the global financial sector.
Due to new banking regulations and financial turmoil in the eurozone, banking profitability has been in decline over the past 12 months. But Shao Zili, China head of JP Morgan, said the bank's China business overall is still growing at a solid pace, although its primary business has been affected by market volatility.
The bank said it remains confident in its plan to double its revenue in China over the next three years. The rapid growth in China comes as JP Morgan reported this month that its global third-quarter earnings fell 4 percent overall.
Other global banking giants, including Goldman Sachs Group Inc and Bank of America Corp, also reported disappointing third-quarter results. "China, which is strategically important for JP Morgan, has been growing much faster than our global business, and we expect the momentum to continue," Shao said on Thursday in an interview.
Hiring will continue in China despite the bank's plan to cut 1,000 jobs in its investment bank globally over the next 18 months. The new hires will in part be deployed in joint ventures and newly established branches in China.
In July, JP Morgan opened its sixth branch, in Harbin in Heilongjiang province, as part of its plan to expand into the country's northeastern region. "We will increase the number of branches in China, but at a gradual pace," Shao said.
Growth in China will be focused on treasury and securities services, investment banking, corporate banking and asset management.
While the bank has a strong retail banking business in the US market, under the Chase brand, Shao said it has no intention to compete in that segment in China at this stage. "We will focus on serving corporate and financial institution clients at this stage," Shao said.
The bank sees a tremendous opportunity in Chinese companies' international expansion, prompted by the government's "going-out" policy, saying it is able to provide one-stop financial services to large enterprises looking to expand internationally.
Shao said the bank's securities joint venture, with Shenzhen-based First Capital Securities Co, has got off to a good start. The joint venture, which allowed JP Morgan to enter domestic securities market, has some equity and debt underwriting deals in the pipeline, Shao said.
The bank is looking closely at the opportunities in Hong Kong's rise as an offshore yuan hub, triggered by the central government's move to internationalize the yuan. It has set up a cross-department committee to study the development and opportunities involved in the yuan's internationalization.