JP Morgan Chase 2010 Annual Report Download - page 15

13
Our Resolute Commitment to Expanding
Our International Wholesale Businesses
One of the greatest opportunities before us
is to grow our wholesale businesses globally.
This opportunity exists not just in developed
markets but also in developing, emerging
andeventheso-called“frontier”markets.
The reasons are simple: As the world grows,
our clients generally grow even faster, as do
trade volumes, capital, cross-border investing
and global wealth.
ArecentMcKinseystudyestimatesthat
global investment, with accompanying
growth in credit and capital needs, will grow
by two times or some $13 trillion over the
next 20 years in real terms – a multiple of
what we saw in the early 1980s. Global invest-
ment will amount to $24 trillion in 2030
compared with $11 trillion in recent years.
Developing economies are embarking on
one of the biggest building booms in history.
Rapid urbanization is increasing demand
for new roads and other public infrastruc-
ture. Companies are building new plants and
buyingmachinery.TheMcKinseyreport,
in fact, warns of potential capital and credit
shortages as this exponential growth occurs.
Banks will play a vital role in financing these
investments and in connecting savers and
borrowers around the world. Much of this
capital and investing will be cross-border and
will be done by the very institutions that our
bank already serves, i.e., multinational corpo-
rations, large investors, sovereign wealth
funds and others.
Rest assured, we are going about this eort
withoureyesopen.Wedonotharborany
false notions that it is easy or risk free. And
you cannot have stop-and-start strategies.
Countries will want to know you are there
for the long run – you cannot be a fair-
weather friend!
International expansion is a long, tough
andsometimestediousjob.Executionoften
requires lengthy lead times, and dierences
in cultures and laws present many chal-
lenges. By necessity, we end up bearing
additional sovereign and political risk. But
the eort clearly is worth it: The opportuni-
ties are great, and the risk can be managed.
Here’showandwhywethinkso.
We essentially are following our customers
around the world
Our wholesale bankers around the world do
business with essentially most of the global
Fortune 2000 plus some 400 of large sover-
eign wealth funds and public or quasi-public
entities (these include governments, central
banks, government pension plans and
governmentinfrastructureentities).
As these entities expand globally – adding coun-
tries and locations to where these organizations
do business – we essentially grow with them.
Wealreadybankthesecompaniesandsimply
need to be where they are going to need us.
We will grow by adding bankers, branches
and products
The overwhelming majority of our worldwide
expansion will come through organic growth –
adding bankers, branches and products.
Some examples of our recent eorts include:
• OurGCBhashired100bankerssince
January 1, 2010, and, by the end of 2012,
we expect to grow to 300 bankers covering
more than 3,000 clients globally.
• InBrazil,ChinaandIndia,wecontinue
to enhance the firm’s presence by adding
bankers and increasing our client coverage.
Five years ago, we covered approximately
200 clients in those countries, and, today,
wecoverapproximately700clientsinthose
threecountries.Weareexpandingthiskind
of coverage in many other countries, too.
• InChina,overthelasttwoyears,weadded
twonewbranches(GuangzhouandChengdu)
to our existing three (Shanghai, Tianjin and
Beijing),andwearecontinuingourexpan-
sion with more branch openings planned
for 2011. Our expanded footprint enhances
our ability to serve both local companies
and foreign multinationals as they grow
their businesses in China. In addition to the
domestic renminbi capabilities, J.P. Morgan is
at the forefront of the internationalization of
the renminbi, a product that more and more
clients are demanding for cross-border trade.
• Aroundtheworld,weopenednew
branches in Australia, Bangladesh, Brazil,
China, Great Britain, Japan, the Nether-
lands,Qatar,SwitzerlandandtheUnited
ArabEmirates,amongothers,andweplan
nearly 20 more to be added by 2013.