JP Morgan’s (JPM.N) is shifting focus to mid-sized firms and family-owned business in a bid to compete against major European banks in a space the latter has dominated for a long time.
Doug Petno, CEO of JPM.N’s corporate banking sector revealed his plans to begin serving up to 1500 “heavily curated, handpicked,” business.
JPM.N’s Petno’s idea is to help firms get access to businesses loans, payment processing, cash management, as well as other banking services.
The move is to challenge veteran big box European banks and another case of the US firm using its thump to split the market share with competitors. After all, isn’t it one of the few banks that weathered the recent financial storms?
Now, JP Morgan is eyeing mid-sized companies in Germany, Italy, The Netherlands, France, Britain and Spain, with $500 million to $2 billion in revenue including well-known brands, long-established companies, and would-be international firms.
Some of these companies already have businesses in the US and use JPM.N, while most of them depend on European investment bankers. JP Morgan makes this move at a time when several Paris bankers are acclimatizing to Brexit.
It took Petno and his team two years to come up with their list of prospects. The JPM.N executives responsible for affairs of each of the included countries played a crucial role in identifying potential clients.
Though it will take JPM.N time to turn prospects into clients and employ staff to serve this large number of firms, Petno is pessimistic they have the power to establish a sustainable business in Europe as they have with their US-based commercial bank which generated $8.6 billion in revenue last year.
Petno, however, did not disclose his objectives, but JP Morgan’s extension to other parts of the globe as a corporate lender is an exceptional opportunity for European banks in the midst of slow growth rates and the lowest interest rates.
According to data from Refinitiv, in the starting half of 2018, Europe’s four leading investment banks (graded by the size of deals they completed) were U.S. banks.
For JP Morgan’s, the secret has been a combination of techniques, from price cuts to offering a range of products and putting extra focus on marketing. As a result, the firm has earned market share in Europe’s capital markets, corporate lending space, U.S. credit cards, asset management as well as securities over the past few years.
Will JP Morgan manage to execute its plan successfully and win most (if not all) of the prospects in its List. Well, maybe the move is worth a shot for a firm that’s been performing remarkably well for the past few years.
Author Bio: Payment industry expert Taylor Cole is a passionate merchant account expert who understands the complicated world of accepting credit and debit cards at your business. His understanding of cutpay merchant services has helped thousands of business owners save money and time.