J.P. Morgan Chase & Co. is putting a sharper focus on the services it offers banks through its investment and wholesale banking group.
The New York company plans to double the number of investor client managers it has assigned to focus on banks, from three currently to five or six by the end of next year, and it is adding smaller institutions to its client list.
This is part of an effort JPMorgan Chase started last year to put its investment bankers in closer contact with clients. The investor client management group was created last summer, co-led by Jeffrey Flug, who had been head of national fixed-income sales at JPMorgan Chase since May 2000. He is a Goldman, Sachs & Co. alumnus.
The investor client group coordinates advisory and trading, sales, and other capital markets activity with clients such as banks, insurance companies, hedge funds, and asset and pension managers. In simpler terms, the group matches senior bankers with top-level client contacts and coordinates their activites with J.P. Morgan's various product sales people.
Tim Main is Mr. Flug's counterpart in the investment bank, as head of the North American Financial Institutions Group. JPMorgan Chase has been winning M&A mandates this year, including representing National Commerce Financial Corp. in its sale to SunTrust Banks Inc.
The investor client management group was created "to formalize coverage" of a key constituency, Mr. Flug said in a recent interview.
Business with other financial institutions accounts for a "significant" portion JPMorgan Chase's investment banking revenues, though the company does not divulge specific numbers, a spokesman said.
JPMorgan Chase is the largest provider of credit and interest rate derivatives, and the second-largest in investment-grade corporate bonds, according to the company's annual report and data from Thomson Financial.
Several other banking companies are expanding their financial institutions groups, particularly on the advisory side. HSBC Holdings PLC recently added two executives to cover finance companies and financial sponsors. Citigroup Inc. is said to be hiring top-level executives for its insurance advisory group.
Last summer, JPMorgan Chase lured Steve Rehm from Citi to become the managing director and head of its bank investor client management group. Since then JPMorgan Chase has added two vice presidents, hiring Bradford Davis from Citi and transfering Karen Lipman from elsewhere in the company. There are 15 other executives in the investment client management group, covering insurance, hedge funds, pension funds, and mutual funds.
The group got a boost with the addition of the 50-person middle-market fixed-income group of Bank One Corp., which JPMorgan Chase bought July 1. Bank One had focused on smaller banks, extending JPMorgan Chase's reach in that area.
About 40 of the Bank One salespeople stayed on in the Chicago offices, where JPMorgan Chase now operates its national middle-market banking group.
