investment banking
TRANSCRIPT
Investment Banking With Reference To J.P. Morgan
Investment banking
Traditionally, banks are engaged either in commercial banking
or investment banking. In commercial banking, the institution collects deposits
from clients and gives direct loans to businesses and individuals. Through
investment banking, an institution generates funds through various channels.
(For e.g. when Mr. Rathod needed a loan to buy a car, he visited a
commercial bank and when he needed to raise cash to fund an acquisition
or to build more factories, he made a phone call to an investment bank).
Investment Banker or Lead Manager or Merchant Banker has
been defined under the Securities & Exchange Board of India (Merchant
Bankers) Rules, 1992 as "any person who is engaged in the business of issue
management either by making arrangements regarding selling, buying or
subscribing to securities as manager, consultant, advisor or rendering corporate
advisory service in relation to such issue management". A "Merchant Banker"
can also be defined as "An organization that acts as an intermediary between
the issuers and the ultimate purchasers of securities in the primary security
market"
Investment Banking is made up of lots of businesses and deal in
almost in the same commodity viz. money — and are structured along broadly
the same lines. Investment banks have two primary roles:
Firstly, they help governments and companies to raise money through the
sale of shares and bonds (a form of long-term lending). Trading securities
for cash or securities (i.e., facilitating transactions, market-making), or the
promotion of securities (i.e., underwriting, research, etc.) referred to as the
"sell side."
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Secondly, they maintain a market in those stocks and shares (collectively
known as securities) by acting as brokers, enabling their buying and selling.
Dealing with pension funds, mutual funds, hedge funds, and the investing
public, who use the products and services of the sell-side in order to
maximize their return on their investment constituting the "buy side".
To continue ‘investment banking is what investment banks do’.
This definition can be explained in the context of how investment banks have
evolved in their functionality and how history and regulatory intervention have
shaped such an evolution. Investment banks help companies and governments
and their agencies to raise money by issuing and selling securities in the
primary market. They assist public and private corporations in raising funds in
the capital markets (both equity and debt), as well as in providing strategic
advisory services for mergers, acquisitions and other types of financial
transactions.
Definition
“An individual or institution, which acts as an underwriter or
agent for corporations and municipalities issuing securities. Most also maintain
broker/dealer operations, maintain markets for previously issued securities, and
offer advisory services to investors. Investment banks also have a large role in
facilitating mergers and acquisitions, private equity placements and corporate
restructuring. Unlike traditional banks, investment banks do not accept deposits
from and provide loans to individuals. Also called Investment Banker.”
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Needs and importance of investment banking
Any firm contemplating a significant transaction can benefit from
the advice of an investment bank. Although large corporations often have
sophisticated finance and corporate development departments provide
objectivity, a valuable contact network, allows for efficient use of client
personnel, and is vitally interested in seeing the transaction close.
Most small to medium sized companies do not have a large in-
house staff, and in a financial transaction may be at a disadvantage versus larger
competitors. A quality investment banking firm can provide the services
required to initiate and execute a major transaction, thereby empowering small
to medium sized companies with financial and transaction experience without
the addition of permanent overhead, an investment bank provides objectivity, a
valuable contact network, allows for efficient use of client personnel, and is
vitally interested in seeing the transaction close.
Most small to medium sized companies do not have a large in-
house staff, and in a financial transaction may be at a disadvantage versus larger
competitors. A quality investment-banking firm can provide the services
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Organizational structure of an investment bank
I. The main activities and units: The primary function of an investment bank is buying and
selling products both on behalf of the bank's clients and also for the bank itself.
Banks undertake risk through proprietary trading, done by a special set of
traders who do not interface with clients and through Principal Risk, risk
undertaken by a trader after he or she buys or sells a product to a client and does
not hedge his or her total exposure. Banks seek to maximize profitability for a
given amount of risk on their balance sheet. An investment bank is split into the
so-called Front Office, Middle Office and Back Office. The individual activities
are described below:
1. Front Office: Investment Banking is the traditional aspect of investment banks
which involves helping customers raise funds in the Capital Markets and
advising on mergers and acquisitions. Investment bankers prepare idea pitches
that they bring to meetings with their clients, with the expectation that their
effort will be rewarded with a mandate when the client is ready to undertake a
transaction. Once mandated, an investment bank is responsible for preparing all
materials necessary for the transaction as well as the execution of the deal,
which may involve subscribing investors to a security issuance, coordinating
with bidders, or negotiating with a merger target. Other terms for the
Investment Banking Division include Mergers & Acquisitions (M&A) and
Corporate Finance (often pronounced "corpfin").
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Investment management is the professional management of various securities
(shares, bonds etc) and other assets (e.g. real estate), to meet specified
investment goals for the benefit of the investors. Investors may be institutions
(insurance companies, pension funds, corporations etc.) or private investors
(both directly via investment contracts and more commonly via collective
investment schemes eg. mutual funds) .
Financial Markets is split into four key divisions:
Sales
Trading
Research
Structuring .
Sales and Trading :
It is often the most profitable area of an investment bank ,
responsible for the majority of revenue of most investment banks In the process
of market making, traders will buy and sell financial products with the goal of
making an incremental amount of money on each trade. Sales is the term for the
investment banks sales force, whose primary job is to call on institutional and
high-net-worth investors to suggest trading ideas (on caveat emptor basis) and
take orders. Sales desks then communicate their clients' orders to the
appropriate trading desks, which can price and execute trades, or structure new
products that fit a specific need.
Research :
It is the division which reviews companies and writes reports
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about their prospects, often with "buy" or "sell" ratings. While the research
division generates no revenue, its resources are used to assist traders in
trading, the sales force in suggesting ideas to customers, and investment
bankers by covering their clients. In recent years the relationship between
investment banking and research has become highly regulated, reducing its
importance to the investment bank.
Structuring:
It has been a relatively recent division as derivatives have come
into play, with highly technical and numerate employees working on
creating complex structured products which typically offer much greater
margins and returns than underlying cash securities.
2. Middle Office :
Risk Management involves analysing the market and credit risk
that traders are taking onto the balance sheet in conducting their daily trades,
and setting limits on the amount of capital that they are able to trade in order to
prevent 'bad' trades having a detrimental effect to a desk overall. Another key
Middle Office role is to ensure that the above mentioned economic risks are
captured accurately (as per agreement of commercial terms with the
counterparty) correctly (as per standardised booking models in the most
appropriate systems) and on time (typically within 30 minutes of trade
execution). In recent years the risk of errors has become known as "operational
risk" and the assurance Middle Offices provide now include measures to
address this risk. When this assurance is not in place, market and credit risk
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analysis can be unreliable and open to deliberate manipulation.
3. Back Office:
Operations involve data-checking trades that have been
conducted, ensuring that they are not erroneous, and transacting the required
transfers. While it provides the greatest job security of the divisions within an
investment bank, it is a critical part of the bank that involves managing the
financial information of the bank and ensures efficient capital markets through
the financial reporting function. The staff in these areas are often highly
qualified and need to understand in depth the deals and transactions that occur
across all the divisions of the bank.
II. Recent evolution of the business
1. New products:
Investment banking is one of the most global industries and is
hence continuously challenged to respond to new developments and innovation
in the global financial markets. Throughout the history of investment banking,
many have theorized that all investment banking products and services would
be commoditized. New products with higher margins are constantly invented
and manufactured by bankers in hopes of winning over clients and developing
trading know-how in new markets. However, since these can usually not be
patented or copyrighted, they are very often copied quickly by competing
banks, pushing down trading margins.
For example, trading bonds and equities for customers is not a commodity
business but structuring and trading derivatives is highly profitable .Each OTC
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contract has to be uniquely structured and could involve complex pay-off and
risk profiles. Listed option contracts are traded through major exchanges, such
as the CBOE, and are almost as commoditized as general equity securities.
In addition, while many products have been commoditized, an increasing
amount of profit within investment banks has come from proprietary trading,
where size creates a positive network benefit (since the more trades an
investment bank does, the more it knows about the market flow, allowing it to
theoretically make better trades and pass on better guidance to clients).
2. Possible conflicts of interest:
Potential conflicts of interest may arise between different
parts of a bank, creating the potential for financial movements that could be
market manipulation. Authorities that regulate investment banking (the FSA in
the United Kingdom and the SEC in the United States) require that banks
impose a Chinese wall which prohibits communication between investment
banking on one side and research and equities on the other. Some of the
conflicts of interest that can be found in investment banking are listed here:
Historically, equity research firms were founded and owned by
investment banks. One common practice is for equity analysts to initiate
coverage on a company in order to develop relationships that lead to highly
profitable investment banking business. In the 1990s, many equity researchers
allegedly traded positive stock ratings directly for investment banking business.
On the flip side of the coin: companies would threaten to divert investment
banking business to competitors unless their stock was rated favorably.
Politicians acted to pass laws to criminalize such acts. Increased pressure from
regulators and a series of lawsuits, settlements, and prosecutions curbed this
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business to a large extent following the 2001 stock market tumble
Many investment banks also own retail brokerages. Also during
the 1990s, some retail brokerages sold consumers securities which did not meet
their stated risk profile. This behavior may have led to investment banking
business or even sales of surplus shares during a public offering to keep public
perception of the stock favorable.
Since investment banks engage heavily in trading for their own
account, there is always the temptation or possibility that they might engage in
some form of front running.
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Functions and services provided by Investment bankers
1. Mergers and Acquisitions (M&AQ):
A merger is defined as a combination of two or more companies into a
single company where one survives and the others lose their corporate
existence. A merger is also defines as amalgamation wherein the shareholders
of the combining companies become substantially the shareholders of the
company formed.
A takeover is referred to as acquisition which is the purchase by one
company of a controlling interest in the share capital of another existing
company.
Merchant Bankers are the middlemen in settling negotiations
between the buyer and the seller. The main aim of the IB is to safeguard the
interest of the shareholders in both companies. Hence they play a vital role in
M&As.
Based on the current business objective the search of the acquirer
company will start for a merger partner company i.e. if the objective of the
merger is growth oriented (seeking expansion in production and market
segments or optimum utilization of company’s existing resources) then the
acquirer company will select a business related to its current line of business as
a merger partner. On the other hand if the objective is diversification then the
acquirer company will seek a merger partner not related to its current business
activities.
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On proposing the merger/acquisition the IB will provide the
following services:
Appraise the proposal with respect to financial viability and technical
feasibility
Arrange meetings
Negotiate between parties
Determine the purchase consideration
Mode of payment
Comply with legal formalities – e.g. obtaining necessary approvals from the
regulators (i.e. Government / RBI)
Draft the scheme of amalgamation (merger/ acquisition)
Approval of boards etc.
2. Corporate counseling: It includes a whole range of financial services provided by
an IB to a corporate with a view to ensure better performance, maintain steady
growth and create a better image among investors. It covers the entire field of
IB services. However it should be noted that the scope of corporate counseling
is limited to suggestions and opinions leaving to the client to take corrective
actions for solving its corporate problems.
Basically the I-banker finds out the problem areas of an enterprise
which include organisational goals, operational scales, choice of a product,
expansion plans (new product launches), forecasting of a product, and
restructuring of a business, if required, in order to sustain growth in the long
run.
3. Project counseling:
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This is an important IB function which requires the I-banker to be
involved right from inception i.e. birth of an idea – effective execution –
successful completion.
The I-banker provides the following services in this scenario:
Appraise the project considering various aspects - as to the type of project,
location, technical, commercial and financial feasibility.
Preparing a project report (to procure regulatory approvals, financial
assistance, conducting market studies etc)
Deciding upon a finance pattern i.e. to opt for a mix of internal and external
sources (owners funds, borrowed funds, private investors or public issues)
Presenting the project to potential investors
Take care of all documentation in the process
4. Loan syndication / credit syndication:
On deciding the project to be undertaken the next crucial step in
any business scenario is looking for sources wherefrom funds could be procured
to implement the project. This function rendered by the IB in arranging and
procuring the funds from financial institutions, banks and other lending sources
for financial the clients project cost or working capital requirement is referred
to as Loan Syndication or Credit Syndication.
The main services provided here are:
Preparing project details
Locating sources of funds
Selecting suppliers of funds
Preparing and filing of loan application
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Obtaining sanction letters and complying with terms and conditions for
availing the loans
5. Management of public issues:
Public issue management involves marketing of corporate stocks
by offering the securities in the primary market to the public in an IPO (Initial
Public Offering) and in the secondary market through private placements (other
companies, financial institutions etc) or offering the securities to existing
shareholders.
As a manager to a public issue it is expected of the IB to provide
pre and post issue assistance as outlined below:
Comply with statutory SEBI Guidelines for listing
Obtain permission of the bourses to the MoA and AoA
Appoint other managers, bankers, underwriters, brokers, lawyers
Advise the company to appoint auditors, solicitors and BOD (board of
directors)
Draft/ finalise the prospectus including price band, opening and closing date
of the issue, timing the issue considering market sentiments
Liaise with the registrar to the issue
Application for listing with the bourses
Advertise the issue
Underwrite the issue
Allotment /refund of subscription
Calculation of underwriters liability in case of undersubscription
6. Underwriting of IPOs:
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Underwriting is a guarantee given by the IB that in the event of
under subscription the amount underwritten would be subscribed in the same
proportion by the underwriter.
As an underwriter the IB gets the following benefits:
earns a commission on the commitment
a right to be appointed as bankers to the issue
expands its clientele
7. Portfolio management/wealth management:
Merchant Bankers manage portfolio of securities on behalf of their
clients, provided special services with a view to ensure maximum returns with
minimum risk of loss there by building wealth for their clientele to meet long,
medium and short term financial goals.
In order to achieve the above the I-banker provides personalized
services to its clients which include:
Understanding the investment needs of the client
Tax bracket
Risk Appetite
Liquidity requirements
Study the risk factors involved in capital markets
Identify blue chip companies
Should keep abreast of investment guidelines affecting its clients etc.
8. Consultancy to sick units:
In an attempt to turnaround sick industries / units, IBs take on the
following:
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Assess the capital requirements and counsel on restructuring
Appraise on technological, environmental, financial and other factors
sickness
Prepare a step-by-step plan for rehabilitation
Provide assistance in case of takeovers/ mergers
Obtain necessary statutory authorities for implementing the rehabilitation
program
Monitor implementation of the scheme
9. Leasing and hire purchase:
Advise SMEs on lease and hire opportunities available suitable to their
business i.e. lease/hire rather than purchase. IBs advise the company on
finances available, legal documentation and tax counseling.
10. NRI investment and advisory servicers:
In order to attract foreign investment in the primary and
secondary markets I-bankers provide investment advisory services to NRIs. i.e.
Identify investment opportunities – capital markets, real estate etc.
Select securities
Portfolio management – purchase/sale of securities
Provide research reports on investment opportunities
Keep the client informed on RBI/FERA compliances with respect to
investments and sale and return on investments.
11. Venture capital financing:
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Financing an emerging project is called venture capital financing.
The I-banker checks on feasibility of the project and if viable funds the project.
In this financing the I-banker is repaid by selling its stake in the company.
Growth of Investment banking
Growth of the industry:
Investment banking is one of the most global industries and is hence
continuously challenged to respond to
new developments and innovation in
the global financial markets. New
products with higher margins are
constantly invented and manufactured
by bankers in hopes of winning over
clients and developing trading know-
how in new markets. However, since
these can usually not be patented or
copyrighted, they are very often copied quickly by competing banks, pushing
down trading margins.
In addition, while many products have been commoditized,
an increasing amount of profit within investment banks has come from
proprietary trading, where size creates a positive network benefit (since the
more trades an investment bank does, the more it knows about the market flow,
allowing it to theoretically make better trades and pass on better guidance to
clients).
The fastest growing segment of the investment banking
industry, are private investments into public companies (PIPEs). Such
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transactions are privately negotiated between companies and accredited
investors. Large bulk bracket brokerage firms and smaller boutique firms
compete in this sector.
Global investment banking revenue increased for the fifth
year running in 2007, to $84.3 billion. These were up 21% on the previous year
and more than double the level in 2003. Despite a record year for fee income,
many investment banks have experienced large losses related to their exposure
to US sub-prime securities investments.
Though the tremors of the US Sub-prime crisis were felt early
last year, the gravity of the situation was underplayed and a turnaround was
expected or rather wished for. But a year down the line the situation has
spiraled beyond control threatening the US Financial System (seeking a USD
700 Bn bailout package). In less than two weeks 5 of the largest IBs (2
converted into commercial banks) have crumbled announcing the death of IBs
on Wall Street and making the Securities Exchange Commission (SEC)
regulator for I-Banks in the US basically redundant. Below is a brief synopsis
of the debacle of the mighty I-Banks:
Lehman Brothers – Filed for
Bankruptcy – Chapter 11 – rescued
by Barclays Plc / Nomura Bank
Baer Sterns – Rescued by J P
Morgan Chase Bank
Merill Lynch – Part assets taken
over by Bank of America
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Goldman Sachs – Converted into a Commercial Bank and will hence come
under stringent bank. Looking to purchase smaller commercial banks with
huge deposits
Morgan Stanley - Converted into bank. May be sold to Wachovia Corp
Investment banking-India
The economic liberalization in India has witnessed increased
economic activities of foreign investors in India through investment banks.
India has become one of the most preferred destinations for investors. As a
matter of fact a large number of investment banks have opened shops in India to
encash on the India Growth Story.
Indian companies are now more research oriented than ever before.
Investment Banks in India like Citigroup, Morgan Stanley, Merrill Lynch, and
Deutsche Bank are selling the India story to their global clients. Investment
Banks in India have posted over 50% a year returns from the equity markets in
the last few years.
Citigroup held the first India Investor Conference in the country,
where large cap companies and many mid-cap companies made presentations to
institutional investors. Deutsche Bank took their top investors to the facilities of
blue-chip Indian companies. Over 150 top institutional investors of Citigroup
from the US, Europe, the Asia-Pacific region, and Japan attended the
conference. Merrill Lynch held investor conference, which was attended by
over 150 FII clients from all over the world. The objective of these investor
conferences is to help the client realize the happenings of the Indian financial
market.
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Careers in investment banking are lucrative and one of the most
sought after positions in the money-market world. A career in investment
banking involves extensive traveling, grueling hours and an often cut-throat
lifestyle. While highly competitive and time intensive, investment banking also
offers an exciting lifestyle with huge financial incentives that are a draw to
many people.
Current Scenario - India
Given the current market scenario in India Investment bankers
have started bearing the brunt of the slowdown in IPO’s and mergers and
acquisitions. Investment banking fees in India have dropped to Rs. 216 in Cr. in
comparison to Rs. 771 crore for the calendar year 2007, indicating a drop of
57.9 per cent on year-on-year basis (source: Business Line article dated
September 11, 2008). The article also mentions that the average percent fees
have declined to 1.21 per cent so far this year from 2.24 per cent in 2007. The
IPO pipeline has almost fully dried up, while there has been a dip in private
equity and M&A deals.
In contrast, investment banking fees have fallen only 19 per cent in
the Asia-Pacific region. The fall is more in India because the market is high
beta, while cross-border volume of M&A deals has declined by 51.1 per cent
from the same period last year.
Interestingly, loan syndication grew 66 per cent compared to a
69.4 per cent fall in equity capital market activity. State Bank of India topped
the overall i-banking league table with 31 deals amounting to $31.3 million
followed by Merrill Lynch with 18 deals worth $26.3 million.
Lots of companies have withdrawn or postponed their IPO’s this
year for the same reason. Private equity activity has also witnessed a
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deceleration after some of the PIPE deals (private equity in public enterprise)
turned sour.
Energy, power and telecom were the main contributors to the
revenues with 50 and 18 deals respectively. While energy sector saw the much
coveted IPO of Reliance Power, there were some important deals in telecom
such as the Idea-Spice merger and stake sale in Aditya Birla telecom to
Providence equity partners. Reliance Power IPO of Rs. 11,563 crore incurred a
merchant banking fee of Rs. 50.46 crore, amounting to 0.44 per cent of the
issue size. Excluding Reliance Power, the percentage fees during 2007 to 2008
till date is in the range of 3.17 percent to 3.67 per cent (source: Business Line
article dated September 11, 2008)
Kotak Mahindra Bank topped the equity capital market
mobilization chart, which includes follow-on offerings, IPO’s and convertibles.
The Finance Minister has assured investors that the Indian
Economy will not be affected by the recent mayhem on Wall Street. The only
major exposure to the turmoil being that of ICICI Bank to Lehman Brothers,
which is no reason to set the alarm bells ringing. The Indian Story is intact!
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Introduction to J. P. Morgan
“Our aim is to be the world’s most trusted and respected financial services institution.”
J.P. Morgan is a leader in financial services, offering innovative and intelligent solutions to clients in more than 100 countries with one of the most comprehensive global product platforms available. We have been helping our clients to do business and manage their wealth for more than 200 years and we keep their interests foremost in our minds at all times. This combination of product strength, intellectual capital and character sets us apart as an industry leader.
J.P. Morgan is part of JPMorgan Chase & Co. (NYSE: JPM), a global financial services firm with assets of $2.0 trillion.
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Businesses: J.P. Morgan is a leader in asset management, investment banking, private banking, treasury and securities services, and commercial banking. Our broad global platform and strength enable us to create long-lasting value for clients.
J.P. Morgan is a leader in asset management, investment banking, private banking, treasury and securities services, and commercial banking. Today, the firm serves one of the largest client franchises in the world, including corporations, institutional investors, hedge funds, governments and affluent individuals in more than 100 countries.
J.P. Morgan's core businesses include:
Asset Management
Investment Bank Private Banking Securities Services Treasury Services Commercial Banking
Asset Management
Asset Management provides institutional, high-net-worth and individual investor clients with high quality global investment management in equities, fixed income, real assets, hedge funds, private equity and cash liquidity. By building a reputation for investment excellence and superior service, J.P. Morgan Asset Management has become one of the largest asset managers in the world. J.P. Morgan Asset Management is a leading asset manager for institutions, individuals and financial intermediaries, worldwide. Our investment professionals are located around the world providing strategies that span the full spectrum of asset classes including equity, fixed income, cash liquidity, currency, real estate, infrastructure, hedge
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funds and private equity. Specific products may differ by market.
Investment Banking
J.P. Morgan is committed to meeting the evolving investment banking needs of its clients and remaining in the forefront of market innovation. The firm provides clients with first-class merger and acquisition advice, debt and equity capital origination, restructuring capabilities, prime brokerage, risk management and research. It also participates in proprietary trading and investing and market-making in cash and derivative instruments around the world. As one of the world's premier investment banks, J.P. Morgan serves the needs of our clients by offering a world-class platform coupled with straightforward, intelligent advice. We attribute our long-term success to our commitment of always putting clients' interests first. Whether it's raising capital to meet growth objectives or identifying strategic business partners, J.P. Morgan offers M&A advisory, capital markets, prime brokerage, restructuring, risk and research platform of unrivaled strength and scale.
We were founded more than 200 years ago and have a proud history of, in the words of one of our founders, doing "only first-class business... in a first-class way."
Private Banking
J.P. Morgan understands the complex challenges and opportunities that individuals and families of wealth face. In its advisory capacity, J.P. Morgan helps its clients to protect and grow their wealth across generations, creating the potential for them to achieve the vision they seek for themselves, their families, their businesses and their legacies. Clients benefit from a diverse range of expertise spanning investments, wealth structuring, trust and estate planning, credit, banking and risk management
At J.P. Morgan, our mission is simple: first class business… in a first class way. In everything we do, excellence and integrity are the guiding principles. Excellence means more than 160 years of experience and knowledge that comes from solving the complexities of significant wealth, day in and day out. We augment this knowledge with some of
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the boldest, most innovative thinking today. Integrity means keeping your interests front and center always and carrying out our work with utter discretion.
Whether you are a business owner, executive or member of a family enterprise, we endeavor to create risk-adjusted strategies to help you achieve your goals. Working hand-in-glove with your advisors, and bringing together the strengths of the global J.P. Morgan family as well as external best-in-class resources.
Security Services J.P. Morgan is a premier securities servicing provider that helps institutional investors, alternative asset managers, broker dealers and equity issuers optimize efficiency, mitigate risk and enhance revenue. J.P. Morgan leverages the firm's unparalleled scale, leading technology and deep industry expertise to service investments around the world.
Worldwide Securities Services
J.P. Morgan Worldwide Securities Services is a premier securities servicing provider that helps institutional investors, alternative asset managers, broker dealers and equity issuers optimize efficiency, mitigate risk and enhance revenue. Worldwide Securities Services leverages the firm's unparalleled scale, leading technology and deep industry expertise to service investments around the world. It has $13.7 trillion in assets under custody and $5.1 trillion in assets under administration.
Treasury Services
Treasury Services provides innovative payment, collection, liquidity and investment management, trade finance, commercial card and information solutions to the world's leading
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companies, governments, regional banks and global financial institutions.
We have a presence in 39 countries, treasury employees in 40 U.S. states and a supporting branch network in 17 states. Our clients range from small businesses to some of the world's largest multinational corporations, governments, regional banks and global financial institutions.
Commercial Banking
Commercial Banking provides the complete product offering of JPMorgan Chase, including lending, treasury services, investment banking and investment management to corporations, municipalities, financial institutions and not-for-profit entities with annual revenues generally ranging from $10 million to $2 billion.
Commercial Banking serves more than 26,000 clients nationally, including corporations, municipalities, financial institutions and not-for-profit entities with annual revenue generally ranging from $10 million to $2 billion, and nearly 30,000 real estate investors and owners.
Commercial Banking offers its clients industry knowledge, experience, a dedicated service model, comprehensive solutions and local expertise. The firm’s broad platform positions us to deliver extensive product capabilities – including lending, treasury services, investment banking and asset management – to meet our clients’ U.S. and international financial needs.
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Culture
“I should state that at all times the idea of doing only first class business, and that in a first class way, has been before our mind”
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J.P. Morgan, Jr. used these words at a Senate Sub-Committee hearing in May 1933. More than 70 years later, "first-class business in a first-class way" continues to describe the way we work in over 50 countries around the world every day. By holding the firm and our employees to the highest ethical standards in support of clients, we have remained among the world’s most trusted and respected financial services institutions. Our clients appreciate that we understand their needs and act in their interest. Our focus on partnership, our emphasis on trust, and our desire to constantly perform better also helps us attract like-minded colleagues from the broadest, most intelligent talent pool in the world. We hire people who are driven to perform, who keep their word and who hold themselves to the highest standards.
People
“Along with our reputation, our people are most valuable asset”
In an industry as dynamic, innovative and complex as financial services, we need the very best employees. We are deeply committed to cultivating an inclusive environment where everyone can succeed based on merit. We believe no barrier should inhibit an individual from performing to his or her full potential. We – and our clients – have experienced first-hand the benefits of being actively inclusive, operating as a meritocracy, and embracing diversity to harness the talent and experience of our best individuals. These, and other, aspects of our culture enable creativity and entrepreneurship to
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thrive. To help us identify individuals for positions in the firm, J.P. Morgan has relationships with university and graduate school programs located across the globe. New recruits can look forward to further leadership training once they have been hired. Visit the Careers site to learn more.J.P. Morgan's global alumni network provides former employees with networking opportunities while promoting the ongoing benefits of being associated with the firm. By joining, alumni are able to participate in J.P. Morgan-hosted events with speakers, gain business insights from associating with former colleagues and current employees, and participate in networking events
Values
“our values are reflected in the way that we conduct our business and in the first class results that we consistently achieve for our clients”
Our values are reflected in the way that we conduct our business and in the results that we consistently achieve for our clients. We believe that shareholders will benefit as we do the right thing for our clients and the communities we serve.
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Character, Strength and Intelligence define our distinctive way of doing business. These values also make J.P. Morgan an outstanding place to start a career. When we asked our people why they joined and why they stay, these values came through in their reasons. In fact, the same six reasons came up again and again.
J. P. Morgan in India
India is an important focus for J.P. Morgan’s expansion in the Asia
Pacific region. The lines of business include the Investment Bank, Private
Equity, Asset Management and Treasury and Securities Services. J.P. Morgan
offers clients an integrated range of services that combine specialist local
knowledge with leadership positions across these lines of business.
Additionally, J.P. Morgan has a large Global Service Center in India
that is rapidly expanding in scope and size. The service center has delivered
process innovations that benefit our lines of business and support operations
across the world.
The firm's roots in India date back to 1930 when it started a
representative office. From being a founding shareholder of ICICI in 1955, to
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establishing the first international investment bank in India in 1993,
J.P. Morgan's commitment to India is well established. This is further illustrated
by the work done by the firm in cooperation with the Ministry of Finance,
Reserve Bank of India and various Ministries within the government of India.
As the history of the firm in India shows, J.P. Morgan continues to
take a long-term approach to client solutions. Learn more about J.P. Morgan's
presence across Asia Pacific.
We are a leading financial services firm with global expertise and
reach. Our operations in India span Investment Banking, Private Equity, Asset
Management and Treasury and Securities Services. We offer clients an
integrated range of services which combine specialist local knowledge with
leadership positions across these lines of business. Additionally, we operate a
Global Service Center in India which is rapidly expanding in scope and size.
Our service center has delivered process innovations which
benefit the firm's lines of business and support operations across the world.
Local operations are linked to the world's major financial hubs of New York,
London and Hong Kong by a global distribution network.
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History
By the time you get to the end of this sentence, we'll have
changed. As the markets constantly move, so do we. Our innovation and ability
to stay ahead are what give our clients the edge to meet their strategic needs,
today and tomorrow.
Since our inception some 200 years ago, we've evolved to offer
the whole spectrum of global banking and financial services - and in many
cases helping to define them. It is the combination of character, product
strength and intellectual capital that sets us apart as an industry leader. We
invented the concept of relationship banking back in the nineteenth century and
we are still doing first-class business in a first-class way.
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At J.P. Morgan, we have been helping our clients to do first-
class business for more than 200 years. Throughout that period, we have taken a
long-term approach to client solutions - providing committed, innovative and
consistent advice and execution to our clients at all times. We look forward to
providing our clients with first-class service over the next 200 years
As a firm, we have a history of showing leadership, especially
during times of financial crisis. We continue to build on that legacy. From our
earliest days, we have contributed to business, society and world affairs. Our
actions have always been driven by the desire to do the right for today and
tomorrow.
At J.P. Morgan, we've been helping our clients do business for more
than 200 years. From our earliest predecessors to the present, we have
contributed to business, society and world affairs. We continue to take a long-
term approach to client solutions - providing clients with first-class business in
a first-class way.
Take a tour of J.P. Morgan history & heritage on our interactive
timeline. Our roots stretch back to 1799 with the creation of the Bank of the
Manhattan Company. J.P. Morgan & Co. was founded in New York in 1871 as
Drexel, Morgan & Co. by Philadelphia banker Anthony Drexel and J. Pierpont
Morgan, a historical figure in business.
We've never been a purely U.S. bank, either. Our roots in Europe
go back to 1838 and we've been in Asia since 1872.
In 1901, we created the world's first billion-dollar corporation. In
1907 we saved several trust companies and a leading brokerage house from
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insolvency, bailed out New York City and rescued the New York Stock
Exchange.
Take a tour of J.P. Morgan history & heritage on our interactive
timeline.
J. P. Morgan Background Summary
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial
services firm with assets of $2.2 trillion and operations in more than 60
countries. The firm is a leader in investment banking, financial services for
consumers, small business and commercial banking, financial transaction
processing, asset management, and private equity. A component of the Dow
Jones Industrial Average, JPMorgan Chase serves millions of consumers in the
United States and many of the world’s most prominent corporate, institutional
and government clients under its J.P. Morgan, Chase and WaMu brands.
J.P. Morgan offers M&A advisory, capital markets, prime brokerage,
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restructuring, risk and research platform of unrivaled strength and scale.
Investment Banking Analyst
In Corporate Finance, you work with top-tier professionals at the
heart of a leading global investment bank. You will be engaged with clients
from major corporations, financial institutions and governments. Following
training, you immediately assume significant responsibility in a team
environment for marketing, structuring and executing deals.
Merger of J. P. Morgan
In July 2004, the merger of two powerful and globally renowned
institutions, JPMorgan Chase & Co and Bank One, created one of the world's
most dominant financial service corporations. And as the 2008 merger with
Bear Stearns illustrates, J.P. Morgan continues to demonstrate market
leadership.
Firm-wide, we now have top-tier positions in both business-to-
business (wholesale) and mass-market (retail) banking, alongside a more
balanced earnings stream, greater scale and financial strength. Our retail
businesses operate under the Chase brand. Within our wholesale businesses, it's
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the future of the Investment Bank, Asset Management and Treasury and
Securities Services that we're shaping by hiring the very best graduates across
the globe.
Our mission now is a simple one: to be the best financial services
company in the world. In this, we're certainly inspired by our history. But we're
more excited by the future.
J.P. Morgan is one of the leading merger and acquisitions advisory
firms today, ranking atop many of the rankings for this sector. The firm’s in-
depth expertise extends to a wide range of strategic M&A transactions,
including asset purchases and dispositions, restructurings and reorganizations.
With its strong relationships with many of the leading financial sponsors
groups, J.P. Morgan is also able to help clients gain access to today’s growing
pool of private equity financings. The M&A business is a critical component
underpinning the firm's global integrated model and leading financing
franchise.
J.P. Morgan’s dedicated corporate defense team also has significant expertise
and experience in providing corporate defense advisory services to clients in
public and private situations.
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Global locations
J.P. Morgan has clients in over 100 countries and offices in over
50 countries. Depending on your role, working here gives you the opportunity
to have an international career. You may find yourself interacting with
colleagues and clients from all over the world on a daily basis.
To view J.P. Morgan's global locations, drag the map with your
mouse and double-click to zoom, or use the guide to pan around the globe.
Please note that not every location has programs for Analysts and Associates.
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Employee Networks
J.P. Morgan has more than 70 Employee Networks, initiated by
and for employees, in locations across the globe. These are groups of
employees of a common cultural heritage, gender, age, or interest. They are
valued organizations within the firm and are actively supported by
management.
Employee Networks provide their members with a forum to communicate and
exchange ideas, build a network of relationships across the firm, access to
volunteer opportunities in the community, and support for career development
and mentoring. More than 20,000 of the company's employees worldwide
participate in one or more Employee Network.
J. P. Morgan mission
At J.P. Morgan, we've been helping our clients do business for
more than 200 years. From the start, we have contributed to business, society
and world affairs - doing first-class business in a first class way. And this has
everything to do with our people. Along with our reputation, our people are our
most valuable asset. In an industry as dynamic, innovative and complex as
financial services, we need the very best employees.
Being a first-class firm also means doing 'good', not just doing
well. J.P. Morgan has a proud tradition of being a good corporate citizen around
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the world. We dedicate significant financial and human capital to supporting
issues and causes important to our business and our people.
Our mission is to be the best financial services company in the
world. To achieve this goal, we focus relentlessly on carrying out our business
principles, which are fundamental to everything we do:
Aspire to be the best
Execute superbly
Build a great team and a winning culture
This is what we strive for - no matter what business area or region - to
achieve world-class results. Our client-focused approach drives our innovative
products and solutions, always maintaining that stamp of quality and integrity.
Clear goals demand a transparent organization. And we are just that.
We know a company is only as strong as its people, so you can expect to join a
diverse team and an inclusive environment that operates with the highest
standards of integrity. Talk to anyone at J.P. Morgan, and it won't be long
before they mention the quality of the people around them and the willingness
of colleagues to offer support and encouragement.
Products of J. P. Morgan
1. Equities:
J.P. Morgan is a global leader in providing a wide range of innovative
equities solutions to investor and issuer clients — from initial public offerings,
secondary placements and equity-linked structures, to private placements,
equity derivatives products, and block and portfolio trading services. We
continually refine our product offerings to provide cutting-edge ideas, superior
execution and state-of-the-art tools for today's changing markets. We offer
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institutional investors, corporates, distributors and affluent individuals the
following products and services:
Worldwide trade execution services across all exchanges and electronic
networks.
Program and special equity trading services.
Transition management services across all asset classes.
Sales, trading and research services on equity-based derivatives, as well
as risk management applications and structured products.
A full range of equity-linked services, including competitive pricing and
complex structuring for new equity-linked issuances, innovative ways to
increase conversion premiums for issuers, and sales and trading services
for institutional clients.
Equity structuring and sales services in the primary markets, including
initial public offerings, follow-on offerings and convertible securities.
Clearance of OTC interest rate and credit derivatives, foreign exchange,
OTC commodities and fixed income securities.
Futures and options execution and clearing services on approximately 70
exchanges globally.
2. Credit Markets:
J.P. Morgan is a global leader in credit markets, which includes:
Structured Credit
Collateralized Debt Obligations Tax-Exempt Capital Markets Prime Brokerage Transition Management
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Structured Credit:
J.P. Morgan’s Structured Credit team is the area with expertise
in credit derivatives, structured products and collateralized debt obligations
globally. Structured credit products are used by clients to achieve many
financial objectives, including yield enhancement, credit risk management,
capital efficiency and benchmark outperformance.
CDOs:
Collateralized Debt Obligations (CDOs) are structured fixed
income securities with cash flows linked to the performance of debt
instruments. Issuers of CDOs include commercial banks, insurance
companies and money managers, who use the products to either gain
regulatory capital relief and manage their credit exposure or lock in term
funding and incremental fee income. CDOs are an emerging asset class
offering value to investors and are rated by the major rating agencies
accordingly.
Tax- Exempt Capital Market:
J.P. Morgan has one of the industry’s leading Tax-Exempt
Capital Markets franchises. The team includes the following groups:
Municipal Banking, including public finance activity and credit
origination for general governmental, transportation, energy, housing and
corporate-backed client sectors.
National healthcare, higher education and cultural institutions
Municipal Bond Sales, trading, syndicate and research
Tax Exempt Derivatives
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Infrastructure Finance
3. Rate Markets:
J.P. Morgan is one of the global market leaders in fixed income
providing market leading liquidity across fixed income securities and OTC
derivatives. We provide our clients with a comprehensive range of products and
solutions that are structured to meet their specific fixed income investment, risk
management and financing requirements. Across the G10 currencies, from a
government bond trade to the most complex structured interest rate note, clients
are able to transact seamlessly across a full product suite including:
Sales & Marketing
Electronic Trading Exotics and Hybrids Research Foreign Exchange Prime Brokerage
Sales and Marketing:
The sales force is aligned against specific countries,
industries and clients, offering custom-tailored strategies adapted to each
client's business imperatives, trading/hedging style, investment preferences and
risk appetite. The design and implementation of tailored solutions extend
beyond client-specific hedging issues and include bespoke advice on asset and
liability management and investment. We are committed to being quick and
responsive to client demand, with dynamic pricing and the ability to absorb
significant risk across all regions globally.
Electronic Trading:
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J.P. Morgan has a fully integrated electronic client solutions
group providing a range of products across the asset classes, including pre-
trade, trade and post-trade solutions to a broad client base. We deliver
instant access to our liquidity and product expertise, giving our clients
unparalleled access to our range of fixed income products. We offer
proprietary risk management tools, enabling clients to measure, quantify and
manage their financial exposure.
J.P. Morgan provides access to the bank's liquidity in the fixed
income space through the following electronic channels:
Trade Web
Bloomberg
Bond Vision
Trading Screen
J.P. Morgan led the ecommerce innovation in the Interest
Rate Derivative OTC market via its strategic involvement in the Request for
Quote (RFQ) trading protocol on the TradeWeb platform, where J.P. Morgan is
the top ranked liquidity provider. We also offer an extensive suite of OTC
products on our Bloomberg JPSX page with extensive pricing for OTC rates
products.
Exotics and hybrid:
Our exotics and hybrids group develops and trades highly
structured, complex derivatives which span multiple asset classes. The group
has enjoyed considerable growth in recent years, and has expanded its product
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range beyond "traditional" interest rate and FX underlying assets. These
innovative trade structures allow clients to express combined views across the
rates, commodities and equities spaces, enabling them to address specific
correlated risks that are not otherwise achievable through trading standard
market instruments.
The group has worked closely with J.P. Morgan's
fixed-income/rates and derivatives research to develop proprietary Tradeable
Index Strategies to allow investors to gain exposure to key asset classes,
benchmarks, and dynamic trading strategies.
Research:
As part of J.P. Morgan's award winning global research group,
our economic and derivative research delivers comprehensive and
innovative research products to assist clients in their hedging, trading and
investment decisions in Rates. The fixed-income strategy team supports the
firm's clients in the fixed income securities, OTC derivative and futures and
optionsmarkets. The team publishes weekly, monthly and quarterly analysis
on all aspects of the fixed income markets. In addition, the team works
closely with individual clients providing analysis to meet their specific
needs.
MorganMarkets, the firm's research website, provides a single point allowing
clients to access all of J.P. Morgan's analysis and commentary on a timely basis.
4. Foreign Exchange
J.P. Morgan is a top tier liquidity provider in global FX markets
offering competitive pricing across 300 currency pairs in cash and derivative
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products. We offer a full spectrum of currency services - from plain vanilla to
exotic options; from major currencies to emerging markets. Options specialists
are located in all major FX centres, to support our clients' needs.
Treasury Online
Treasury OnLine is a customisable set of online treasury
management tools developed by J.P. Morgan's Investment Bank and Treasury
Services business to meet the specific needs of corporate clients. The solution
offers an integrated platform across FX trading and treasury management. It
delivers critical reporting and transaction capabilities for FX dealing, risk
analysis, inter-company netting and cash flow forecasting.
Through Treasury OnLine corporates can take advantage
of an easy-to-implement, cost effective solution that delivers convenient access
to transaction tools and exceptionally rich critical data in real-time. Tools
include a Dealing module through which clients can execute FX deals, such as
spots, forwards and swaps - both inter-company and externally, electronically
linking operating units to the corporate's head office and automating manual
processes in line with treasury policy. Clients also benefit from a Risk module
which enables the analysis and management of currency exposures against a
defined treasury policy at all levels within the organisation. A multilateral,
multicurrency netting module offers the functionality to consolidate payments,
manages disputes, execute FX deals and settle transactions.
Sales and Trading
J.P. Morgan has sales teams based in three major foreign
exchange hubs: New York, London and Tokyo. We are also a market leader in
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Latin America, Eastern Europe and Asian Emerging Markets, with a local sales
and market-making team in many of these locations to ensure we are on-hand to
respond to our clients with the best advice.
Our market-leading FX and e-Commerce solutions give our clients a
competitive advantage for pre-trade, trade and post trade through:
Fast, competitive and consistent pricing in spot, forwards, options, non-
deliverable forwards, and cross-currency swaps.
Trading activity in all freely convertible currencies - with 24-hour
coverage - as well as all major emerging market currencies where we
provide onshore and offshore capabilities.
Market-leading economic, fundamental and technical research and value-
added strategy recommendations.
Design and implementation of tailored solutions including accounting
and taxation advice.
Responsive provision of foreign exchange liquidity offering dynamic and
tailored solutions.
Research
J.P. Morgan's award winning global research group offers comprehensive
foreign exchange, economic and derivative research and analysis to assist
clients in their hedging, trading and investment decisions. The team publishes
weekly, monthly and quarterly reports on all aspects of the foreign exchange
markets. In addition, the team works closely with individual clients to provide
tailored analysis to meet their specific needs.
5. Commodities
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J.P. Morgan’s Global Commodities group is responsible for the sale
of commodity financial products, as well as options and selected physical
commodities, to institutional and corporate clients around the world. Products
include Precious Metals, Base Metals, Agricultural Commodities and Energy.
With extensive experience in creating risk management solutions, J.P.
Morgan is able to meet the needs of both issuer and investor clients.
J.P. Morgan is an active market maker in the traditional softs and
agricultural sub-indices (GSAG, DJAIGSO) and their options. We market
innovative structured baskets that revolve around the underlying products.
Through our Futures and Options Desk, we have a strong presence in the
various commodity exchanges: CBOT, NYBOT, NYMEX, Euronext.LIFFE,
ICE, TGE, CME and TOCOM.
With extensive experience in creating risk management solutions, J.P.
Morgan is able to meet the needs of both issuer and investor clients. J.P.
Morgan has demonstrated its innovative capabilities in:
Derivatives
Pension Advisory
o LifeMetrics
o Hedge Fund Beta Benchmark
Prime Brokerage
Transition Management
Vendor Protection
Prime Services:
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J.P. Morgan offers a comprehensive range of research, sales,
execution, clearing and reporting services to clients globally. Given our
demonstrated leadership and expertise, clients turn to us as a trusted partner to
help them effectively run their businesses and support their clients. We are
committed to delivering the extensive capabilities of the entire firm to clients
across:
Broker Dealer Services
Futures & Options
Prime Brokerage
6. Emerging Markets
J.P. Morgan serves Emerging Markets clients across origination,
derivatives, trading, foreign exchange and research. Our global approach to
Emerging Markets provides maximum reach, while a local presence in each
market ensures client accessibility. Our focus is on selective, strategic
opportunities to participate in developing and fast-growing local markets in
Brazil, Colombia, Russia, the Middle East, China and India.
The Emerging Markets Research team analyzes sovereign and
credit risk in Latin America, Central and Eastern Europe, Africa, the Middle
East and Asia ex-Japan, and makes strategic recommendations for debt issued
in both international and local capital markets.
The team also publishes a suite of bond indices, including the J.P.
Morgan Emerging Markets Bond Index Global (EMBI Global), which tracks
total returns for U.S. dollar denominated debt instruments issued by emerging
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market sovereign and quasi-sovereign entities: Brady bonds, loans, Eurobonds.
Currently, the EMBI Global covers 188 instruments across 33 countries.
7. Securitized Products
The Securitized Product Group originates, underwrites / securitizes
and trades Asset Backed Securities (ABS). These include:
Commercial Mortgage Backed Securities (CMBS)
Real Estate Finance (REF)
Asset Backed Commercial Paper Conduits (ABCP)
Residential Mortgage Backed Securities (RMBS), including cash and
synthetic products
Access the Mortgage Securities confirmation agreement.
8. Structured Products
J.P. Morgan is a leader in structured products across asset classes.
Our expertise covers equities, fixed income, credit, currencies and commodities,
funds and alternative investments. Structured products, also known as
structured investments, can provide enhanced return and increased
diversification for client portfolios, and are sold through distributors to high net
worth individuals and retail investors around the world. Learn more about J.P.
Morgan's offering in your region:
9. Principal Investment Management
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Principal Investment Management seeks to invest firm capital in
attractive, long-term investment opportunities across multiple asset classes and
geographies. Our professionals currently invest in Private Equity, Mezzanine,
Real Estate, Hedge Fund Equity, and Tax-Oriented Investments. We have
investment professionals in New York, Chicago, Los Angeles, London, Hong
Kong, Sydney and Mumbai.
Conclusion
At JPMorgan Chase, we believe that being profitable and doing
good works for the people and the world around us aren't exclusive of each
other; they're integrated goals. When our business is strong and well governed,
we're in a better position to translate positive financial results into sustainable
community and environmental efforts that benefit everyone. This is the essence
of corporate responsibility. Every day, we strive to make our firm a good
corporate citizen - and the most respected financial services institution in the
world. These reports demonstrate our approach.
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J.P. Morgan serves one of the largest client franchises in the world
and is a leader in asset management, investment banking, private banking,
treasury and securities services, and commercial banking. Our combination of
product strength, intellectual capital and character has enabled the firm to
achieve leadership positions in all of the sectors that it competes in.
The JPMorgan brand is used by the Investment Bank as well as the
Asset Management, Private Banking, Private Wealth Management, and
Treasury & Securities Services Divisions. Fiduciary activity within Private
Banking and Private Wealth Management is done under the aegis of JPMorgan
Chase Bank, N.A.—the actual trustee. The Chase brand is used for credit
card services in the United States and Canada, the bank's retail
banking activities in the United States, and commercial banking.
JP Morgan Chase is one of the Big Four Banks of the United States
with Bank of America, Citigroup and Wells Fargo.
India: RBI keeps rates unchanged
At the mid-term review of the annual policy today, the central bank kept
the key policy rates and the cash reserve ratio (CRR) unchanged. The
repo rate and the reverse repo rate remain at 8.0% and 6.0%,
respectively, while the CRR is maintained at 6.5% of the net demand
and time liabilities. The neutral stance towards policy rates is in line
with our expectations.
In the accompanying policy statement, the central bank emphasized
maintaining financial stability in the domestic markets. Indeed, the RBI
noted that the mandated statutory liquidity ratio at 25% and the CRR at
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6.5% have been critical in strengthening the domestic banking system.
The central bank also re-emphasized its concerns about the pace of
credit growth and the evolution of credit quality. Further in the
statement, the central bank reiterated its intention of acting swiftly with
conventional as well as unconventional methods highlighting its priority
of maintaining financial stability.
The RBI today doubled the all-in-cost ceiling for trade credits less than
three years to 200bp above six-month Libor. The central bank had acted
aggressively to manage liquidity in the past few weeks and today’s
statement restated its readiness to undertake further measures to improve
the domestic liquidity situation. Importantly, while noting that it will
maintain a close vigil to prevent liquidity pressures in the domestic
markets, the central bank also stated that it could also act to check the
excesses in liquidity if any.
The RBI highlighted the downside risks to the domestic growth outlook,
triggered by weaker-than-anticipated global economic activity. The
central bank has thus lowered its growth projections for the current
fiscal year to 7.5%-8.0% against the earlier expectations of around 8.0%.
However, the end-March inflation target of 7.0% has been maintained.
J.P. Morgan maintains the real GDP growth forecast of 7.0% for this
fiscal year, with expectation of further moderation in next year’s growth
to 6.8%.
J.P. Morgan expects the central bank to further ease the policy rates
beginning next calendar year. We expect the RBI to lower the repo rate
by 50bp each at the April and July policy meetings. However, we do not
rule out further cuts in the CRR this year. Indeed, the central bank could
further lower the CRR by 100bp till December-end this year, although
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this would be critical on the evolving liquidity situation.
Recent awards
• Best Cash Management Specialist, Financial Institutions, The Asset, 2008
• Best Cash Management Specialist, Liquidity Solution, The Asset, 2008
• Best Bank for Liquidity Management in North America, Global Finance,
2008
• Best Bank Award – United States, Global Finance, 2008
• Best Overall Bank for Payments and Collections in North America, Global
Finance, 2008
• J.P. Morgan Named One of "100 Great Supply Chain Partners" - Global
Logistics and Supply Chain Strategies, 2008
• Cash Management Provider of the Year (for Liquidity Management), ICFA
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European Award, 2008
• Best Trade Services Provider - Trade & Forfaiting Review, 2008
• Best Liquidity Solution Provider, The Asset, 2007
• Best Regional Specialist, Financial Institutions - The Asset, 2007
• Best Supply Chain Finance Bank - Trade & Forfaiting Review, 2007
Ranking of Investment Banks
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Findings and suggestions:
• From the project main finding is the amount of revenue are getting from
investment banking services are equal to commercial banking
revenues.
• Investment bankers have more competition from foreign banks.
• Foreign banks are playing more roles in mergers and acquisition deals.
Suggestions:
• Investment bankers have to concentrate on the advertisements.
• And also they have to offer more products equal to their competitors.
• They have to give effective services to the clients.
CASE STUDIES
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Case study 1: Initial Public Offering (IPO) – RELIANCE
POWER
Date of Issue – January 15, 2008 to 18
January , 2008
Issue Size – 260,000,000 Equity Shares of Rs.
10 each
Price Band – Rs. 405 ~ Rs. 450
Issue Price – Rs. 450/-
Date of Listing : February 11, 2008
BOOK RUNNING LEAD MANAGERS (BRLM) / INVESTMENT
BANKERS
Kotak Mahindra Capital Company Limited
UBS Securities India Private Limited
ABN AMRO Securities (India) Private Limited
Deutsche Equities India Private Limited,
Enam Securities Private Limited,
ICICI Securities Limited,
JM Financial Consultants Private Limited and
J P Morgan India Private Limited
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CO BRLM
Macquarie India Advisory Services Private Limited and SBI Capital
Markets Limited
LEGAL ADVISORS
Domestic Legal Counsel to the Company - Amarchand & Mangaldas &
Suresh A. Shroff & Co.
Domestic Legal Counsel to the Underwriters - J. Sagar Associates
International Legal Counsel to the Underwriters - Cleary Gottlieb Steen
& Hamilton LLP
Syndicate Members/ Underwriters – these are intermediaries registered
with SEBI or as brokers with BSE/NSE who are eligible to act as
underwriters. They are appointed by the BRLMs and CBRLMs
Reliance Securities Ltd.
Kotak Securities Ltd.
ABN Amro Asia Equities (India) Limited
JM Financial Services Private Limited
Karvy Stock Broking Limited
SBICAP Securities Limited
Credit Rating Agency – CRISIL Limited – IPO Grade 4/5 and ICRA
Limited – IPO Grade - 4
Bankers to the Issue and Escrow Collection Banks
ABN Amro Bank N.V.
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Axis Bank Limited
HDFC Bank Limited
The Hong Kong and Shanghai Banking Corporation Limited
ICICI Bank Limited
Kotak Mahindra bank Limited
Standard Chartered Bank
Bankers to the Company
ICICI Bank Limited
HDFC Bank Limited
Joint Statutory Auditors to the Company
Chaturvedi & Shah, Chartered Accountants
Price Waterhouse, Chartered Accountants
Monitoring Agent
IDBI Limited
Trustees to the Issue – As the Issue is of Equity Shares, the appointment of
trustees is not required.
Registrar to Issue and Share Transfer – Karvy Computershare Private
Limited
Case study 2: Mergers & Acquisitions
Merger – Bharti – Vodafone
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India’s leading GSM players Bharti Airtel, Vodafone Essar and
Idea Cellular announced the merger of their wireless infrastructure businesses
in 16 circles to share 70,000 tower units and also form the world’s largest
‘independent’ tower company called Indus Towers Ltd. Bharti and
Vodafone will each have a 42% equity in this infrastructure firm, while Idea
Cellular will hold the remaining 16%. The number of towers being merged into
the new company is in proportion to the shareholding in the new company.
The move will enable all three service providers to increase
efficiencies and reduce expansion costs. The three companies will each merge
their existing passive infrastructure assets in 16 telecom circles in India. Indus
Towers will provide passive infrastructure services to all operators on a
nondiscriminatory basis. Indus Towers will enable optimisation of future tower
roll-out and enhanced operational efficiency leading to opex (operational
expenses) and capex (capital expenditure) savings for its customers.
The Indian consumer will benefit through improved network
reach and quality, more choice and significantly greater access to mobile
services across the country. Even amidst fierce competition, all service
providers in India, the world’s fastest growing mobile market, are working
towards large scale sharing of passive infrastructure to cut down on expansion
costs and keep tariffs low even as they extend their footprint to rural India.
Lower capex and opex are key to offsetting the low usage from new subscriber
additions beyond the large towns and cities. India added over 8 million new
wireless users in October, taking the country’s mobile subscriber base to over
217 million.
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Case study 3: Beam Global’s Successful Travel Card Program
Sees Further Improvement With Corporate Card And Expense
Management Integration
Overview
Beam Global Spirits & Wine, Inc. is one of the world's largest
premium spirits companies and the largest U.S.-based spirits company.
Headquartered in Deerfield, Illinois, Beam Global's Shared Services and
Treasury department manages the travel card program for four separate
operations, including its U.S. corporate office, two production plants based in
Ohio and Kentucky, and Future Brands LLC, its U.S. sales and distribution
joint venture with the Absolut Spirits Company. More than 900 U.S. Beam
Global employees travel within the U.S. and around the world.
Challenge
Even though Beam Global's travel card program had reached a
successful 90 percent utilization rate – significantly higher than the industry's
average utilization rate of 70 percent -- the company sought to further improve
program compliance and shift responsibility for expense reconciliation to their
cardholders and managers, while streamlining and improving its expense
reporting system. When Beam Global combined their existing J.P. Morgan
Corporate Card program with an automated expense management solution from
Concur, they defined the following goals:
Improve program compliance and reduce the rate of delinquent expense
reports
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Deploy an effective solution that would easily integrate with existing J.P.
Morgan Corporate Card program and upcoming SAP rollout
Gain access to real-time card usage data to enable administrators and
employees to better control T&E expenses
Lower administrative time and costs associated with expense report
processing
Leverage spend data to negotiate better rates with suppliers and partners
Shorten the reconcilement and reimbursement cycle
Solution
Beam Global's shared services team was satisfied with the J.P. Morgan
Corporate Card solution and decided to further optimize the card program by
integrating it with Concur's on-demand expense management service to achieve
even greater control and visibility.
Through card program and expense management system integration,
Beam Global could offer users a more efficient method of processing card
expenses, gain complete transparency into transaction data, increase card spend,
and take advantage of card float and volume incentives it had not been able to
capture previously.
“Linking the J.P. Morgan Corporate Card program with Concur's
expense management system has delivered success from both a user and back-
office perspective, owing to efficiencies it has delivered,” said Mike Lippert,
Senior Director, Shared Services and Treasury Operations, Beam Global. “In
addition to saving time on expense report processing, our employees benefit
from a widely accepted card and easy-to-use reporting system.”
Results
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Beam Global has realized significant results through card integration
with their expense management solution. It has enabled the company to:
reduce delinquency rates by 50 percent and significantly lower associated
late fees and time spent reconciling past due charges
increase its impressive card utilization rate from 90 to 95 percent, even
when card spend has increased
eliminate one day's worth of administrative duties each month due to the
automated upload of data files between J.P. Morgan and Concur
more fully leverage working capital by taking advantage of funds
availability from the card program
utilize automated settlement process between Concur and J.P. Morgan,
saving one day of processing per month
access actionable data from Concur and J.P. Morgan spending analysis
reports
identify opportunities for cost savings and improved rates with suppliers
and sales prospects
satisfy travelers with an efficient, easy-to-use system
With detailed reporting from Concur and J.P. Morgan, Beam
Global is able to assess spend data by vendor, category, and division in order to
identify questionable charges and audit for compliance. Concur's expense
reporting service makes it virtually impossible to hide transactions as it
automatically reports all unsubmitted credits and requires reconciliation of
outstanding transactions. Using Concur with J.P. Morgan's card program has
increased both accuracy and compliance due to the complementary features and
benefits of both programs.
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Beam Global implemented its integrated T&E expense system across
four sites in a staggered approach, one month at a time over a three month
period. Just two months later, the company went live on SAP with the T&E
card and the expense reporting data immediately integrated with their new ERP
(enterprise resource planning) system without issue.
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