Chase Manhattan Corp. is considering acquiring a primary dealership in Italy to sell European government securities, as part of a drive to build up its global capital markets operations.
Jorge Jasson, senior vice president and head of international capital/emerging markets at Chase, emphasized that no firm decision has yet been made. He added that the bank was also considering acquiring a primary dealership in another country, such as Spain or France.
But Mr. Jasson said there were more opportunities in Italy, where Chase already has enough capital-markets-related business to make acquiring a primary dealership a "natural fit."
"It should lend itself to improving distribution of government securities and help us serve our global customer base," added Brian Lazell, Chase's managing director for international capital markets in London.
Primary dealers buy up government bond issues and then sell them into the secondary market. Though not necessarily a big profit maker, a primary dealership gives a bank prestige, large volumes of ready-made business, early access to information, and relationships with central banks and companies on which it can build other business.
"As a primary dealer you're a price maker, not a price taker," Mr. Jasson observed.
Chase has been steadily expanding its capital markets activities in the United States, Europe, and Asia as part of a broader drive to develop investment banking operations.
The bank's push into capital markets activities such as debt underwriting was highlighted by recently released figures on the league tables for bond underwritings.
According to information compiled by Securities Data Co., Chase's investment banking unit underwrote $3.5 billion of all kinds of debt and equity in the first quarter, making it the 11th-biggest securities underwriter in the United States.
Other big U.S. banks, notably J.P. Morgan & Co., are pursuing a similar strategy to build up their worldwide capital markets operations. Morgan ranked sixth in the underwriting league tables and runs a primary dealership in each of the G-7 countries: the United States, Britain, France, Germany, Italy, Canada, and Japan.
