J.P. Morgan & Co. has applied to the New York State Banking Department for approval to upgrade its representative office in Seoul, South Korea, to a branch.
The decision comes despite recent setbacks in some Asian markets and a decision to trim local staff.
A spokesman for the bank could not be reached for comment on the move, which follows heavy recent provisions by Morgan in Korea for possible losses.
At yearend Morgan had $3.4 billion in exposure to South Korea, which has suffered a severe economic and financial crisis after heavy overborrowing.
The bank set aside $587 million in provisions to cover possible losses in Asia, including a default on currency swaps with South Korean counterparties. Two of them, SK Securities Co. and Housing and Commercial Bank, have sued Morgan, accusing it of failing to adequately disclose the nature of the risks they were taking on.