JPMorgan to Enhance Focus on Asia - Analyst Blog

With a goal to generate about half of its non-U.S. business from the fastest growing Asian market over the next five years, JPMorgan Chase & Co. (JPM) plans to triple its private banking assets in the region, Bloomberg reported on Tuesday.

As the number of millionaires in the Asia-Pacific region has been increasing significantly, according to the report by Bank of America Corporation (BAC) and Capgemini, an expansion of private banking assets in the region could substantially help JPMorgan to easily gain the majority of its non-U.S. revenues. JPMorgan manages more than $700 billion of assets globally. Currently, it generates about 20% of its non-U.S. business from Asia .

JPMorgan currently has 400 employees in its private bank in Asia. The company plans to increase that headcount by 40% primarily in India and China within the next year. With the intention of strengthening its Asian private banking business, JPMorgan appointed Standard Chartered’s previous global private banking head, Peter Flavel as Asia CEO of private wealth management in July.

Many other international banks including UBS AG (UBS) are also trying to boost their business in Asia.

At a time when the pace of economic recovery is slow, JPMorgan is firing on all cylinders to shore up its revenue stream.

JPMorgan Chase currently retains its Zacks #3 Rank (short-term Hold rating), implying that the stock is expected to perform in line with the broader U.S. equity market in the near term. While we anticipate continued synergies from the company’s diversified operations and strong capital position, pressured credit quality and reduced levels of client activity will drag future earnings.

However, we are impressed to see some improvement in credit quality in the last three quarters. Therefore, we maintain our long-term Neutral recommendation on the stock.