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Friday, 31 October 2014

Urwin to HK: does that really signify regional commitment?

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The most remarkable thing, in my view, about Jeff Urwin’s move to Hong Kong to become JP Morgan’s new Asia-Pacific CEO in place of outgoing Gaby Abdelnour is that he’s taking on a huge additional workload.

IFR Editor-at-large Keith Mullin

IFR Editor-at-large Keith Mullin

He now has overall responsibility for the bank’s strategic activities across the spectrum of business lines and products in a huge region without relinquishing his existing role as head of global investment banking coverage, capital markets and M&A. And he’s had that role for less than a year.

If Urwin’s existing role was already a huge one, surely adding responsibility for a region that the bank needs to pay attention to if it is to match its performance in the US and Europe is too much for one person to do single-handedly.

Urwin’s not alone in taking on a massive extra workload. Christian Meissner, who was only recently appointed sole head of Bank of America Merrill Lynch’s global corporate and investment bank, is also president of Europe and ex-Asia emerging markets, following Andrea Orcel’s move to UBS and Jonathan Moulds’ impending retirement. Is overload the new normal in investment banking?

While the arrangements at BofA Merrill are expected to be temporary; JP Morgan would be well advised to reconsider its decision to push so much responsibility onto Urwin. The bank made a bit of a play about having its head of investment banking in Asia for the first time symbolising commitment to the region.

Of the 68 members of JP Morgan Chase’s ExCom, the investment bank has 13 slots, including CEO Staley. Not one of those individuals has Asia regional IB product responsibilities

That’s all well and good but the reality is not just that Urwin’s going to live on a plane; you have to wonder how much time he’ll actually have to dedicate to building out the bank’s broad region-wide platform if he’s also focusing on maintaining the profile in the US and Europe, which are far bigger revenue generators.

And he’s not an Asia hand. You would have thought that would have been a better option. And you know, for all of Jes Staley’s comments about how important Asia is to the bank, the reality is that Asia investment banking is not represented at all on the firm-wide executive committee. It’s a glaring omission.

Of the 68 members of JP Morgan Chase’s ExCom, the investment bank has 13 slots, including CEO Staley. Not one of those individuals has Asia regional IB product responsibilities.

But the other regions are all represented: Kevin Willsey and Larry Slaughter (co-heads of North American investment banking); Emilio Saracho (head of EMEA investment banking) and Nicolas Aguzin (in charge of LatAm IB) are all on the ExCom, as are ’grey-beards’ Klaus Diederichs (vice chairman of EMEA IB); and New York-based Jimmy Lee (chairman of the investment bank).

In sales and trading, all the IB ExCom roles are global: Carlos Hernandez for equities; Matt Zames and Daniel Pinto for fixed-income; and Blythe Masters for commodities. Paul Compton is CAO.

If it really wants to show commitment to Asia investment banking, JP Morgan needs to promote an Asia IB specialist onto its major decision-making body. And soon.

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