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August 3, 2010 12:06 am
JPMorgan Chase will on Tuesday announce it has hired a former Clinton administration Treasury official to spearhead a new drive to win more commercial banking business from governments in Asia, Africa and Latin America.
The recruitment of Daniel Zelikow, who served under Robert Rubin and is close to Tim Geithner, the current Treasury secretary, is part of JPMorgan’s efforts to boost its overseas revenues by taking on international rivals such as Citigroup and HSBC.
After buying two US banks during the financial crisis, Jamie Dimon, JPMorgan’s chief executive, wants to expand its operations in faster-growing economies, especially in areas such as Africa and the outer reaches of Asia.
JPMorgan’s executives say that, while its investment bank has strong relationships with governments around the world, its cash payments units and asset management businesses need to grow more rapidly to compete with Citi and HSBC.
Cash management services for companies and governments, although less glamorous than investment banking and securities work, have proved a reliable and stable source of profits for Citi and HSBC.
In January, JPMorgan created a global corporate banking unit to sell its commercial banking, cash management and asset management offerings to multinationals around the world.
The appointment of Mr Zelikow, a key US government key official during the Asia and Latin American financial crises in the late 1990s, is the next step in that strategy, executives say.
Mr Zelikow has already worked at JPMorgan, which he joined after leaving the Treasury in 1999. He left the bank in 2007 to become executive vice-president of the Inter-American Development Bank.
As head of JPMorgan’s new international public sector group, Mr Zelikow will be charged with broadening JPMorgan’s existing relationships and building new ones.
JPMorgan executives said one of Mr Zelikow’s key tasks would be to reach governments that currently are not covered by JPMorgan’s investment bankers.
One executive familiar with the matter mentioned Mongolia – a country growing rapidly on the back of its natural resources – and the local authorities of countries such as Brazil as targets for the new unit.
Greg Guyett, chief executive of JPMorgan’s global corporate bank, said: “We have good relationships with a number of governments around the world but traditionally we have not been looking at them in a holistic way.
“Governments are sharpening their focus on areas like payments, custody and asset management and we need to ensure that our relationships with all of our public sector clients always go beyond investment banking and markets areas.”
Mr Zelikow’s group is expected to have about 12 dedicated bankers as well as being able to call upon JPMorgan’s employees round the world.
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