JPMorgan Chase & Co., seizing on the ongoing credit crisis and the transformation of payment systems, announced plans Tuesday to expand its corporate treasury services around the world.
The New York company is planning to spend $1 billion over the next three years to enter new markets and enhance its systems for managing corporate clients' cash and related operations. It also said that it has retained a strong capital position while some rivals have had to seek outside investments.
Alan Koenigsberg, a vice president in the company's JPMorgan Treasury Services, called the plan "a very compelling international expansion program" that would expand existing capabilities and add new ones.
For instance, JPMorgan Treasury Services plans to integrate its online cash management services into a single, global platform that will let clients manage their finances more efficiently across regions, Mr. Koenigsberg said in an interview Tuesday from the Sibos conference in Vienna sponsored by the Society for Worldwide Interbank Financial Telecommunication.
To some extent, JPMorgan Chase is building on investments it has already made, such as an automated clearing house system for the Single Euro Payments Area in Europe, he said. "It began with the international ACH program," but the effort also involves new services.
One new element is an offshore clearing network in Asia that lets clients conduct dollar-denominated transactions there and consolidate their cash balances with same-day finality, Mr. Koenigsberg said. "Asia-Pacific is a significant opportunity, a significant investment — also Latin America."
As its various offerings become more integrated, JPMorgan Treasury Services plans to extend these services into new markets, he said. "There are going to be offshore clearing opportunities in the Middle East in years to come."
Judson Murchie, an analyst in the wholesale banking practice at Aite Group LLC of Boston, said the expansion of cash management and other treasury services could open other doors for JPMorgan Chase with the international companies it serves.
"JPMorgan is one of the leading banks that really realizes what treasury services mean to the bank's bottom line," Mr. Murchie said.
There is strong connection between treasury services and other banking operations, such as the issuance of debt or equity through JPMorgan Chase's investment banking arm, he said. "It's the core relationship from which all the bank's other activities are conducted."
JPMorgan Treasury Services focuses on companies with operations around the world, Mr. Murchie said. "It's sort of the opposite of HSBC and Citigroup, which have indigenous operations in those regions."
By providing a single platform that a company can log into wherever it is located, "they're going to be able to move further and further downmarket," he said.
JPMorgan Chase is not the first to offer an integrated platform. Citigroup Inc. introduced its TreasuryVision system in 2005 to give corporate treasurers a comprehensive view of their accounts and enable transfers between accounts in different countries to minimizes costs for investing and borrowing.
JPMorgan Treasury Services said it would open international image deposit centers in Bahrain, Indonesia, and Pakistan to clear U.S. checks as images on behalf of correspondent banks and corporations, so those clients need not change their own infrastructures or business operations. The unit already has more than a dozen such centers around the world.
It also plans more integration of its financial supply chain offerings, including trade finance and electronic invoice settlement.