HONG KONG J.P. Morgan Chase & Co. has cut 10% of its Asian equities staff this year, and it is reviewing businesses in Pakistan and Thailand to focus on more profitable units in Hong Kong, Taiwan, and South Korea.
The second-biggest U.S. banking company may also cut back or close its retail stock brokerage business in Thailand as it reorganizes its regional business in the wake of two acquisitions last year and the slowest expansion of Asian economies and stock markets since the regions financial crisis of 1997-1998. A third of its 870 Asian equity staffers outside of Japan are located in Thailand.
The changes, which include the promotion of Andrew Houston to chief operating officer for Asia-Pacific equity research, were outlined in a 47-page slide presentation dated July 2001. The news was delivered to equity staff in the region last week at meetings attended by Steve Black, Morgan Chases New York-based head of institutional equities.
We have upgraded the underperformers, the company said in the presentation. We are now in a position to achieve our mission to be Asias pre-eminent equities house by 2004.
Morgan Chase ranked sixth in equity brokerage business in Asia outside Japan, according to a May Institutional Investor survey.
A company spokeswoman in Hong Kong declined to comment.
Investment banking firms in Asia, including Goldman Sachs Group Inc., Merrill Lynch & Co., Bank of America Corp., and ING Barings, have been reducing staff levels in Asia, though the scope of the cuts has not yet equaled their cutbacks in the United States or Europe.
After Chase Manhattan Corp. bought Robert Fleming Holdings Ltd. and then J.P. Morgan & Co. last year, it identified its equities division as the weakest of its global businesses. In Asia, where the stock markets are deregulating trading fees to woo investors, the company said its average commission rate in the first half fell 15% from a year earlier.
Still, it said the reorganization would not damage its long-term plans in the region.
This month Morgan Chase reported that its second-quarter profits fell 61%, to $690 million, as it wrote off $1 billion of investments in private companies, and fees from underwriting and trading securities dropped.
Last year it said that it would cut about 5,000 of its 90,000 employees worldwide, but in May it said it would not make wholesale cuts in Asia.