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JPMorgan Chief Executive Jamie Dimon said on Thursday that parts of its China business have “fallen off a cliff” in recent years, highlighting the challenges Western institutions face in China’s investment banking sector.
In private comments to attendees of the bank’s key conference in Shanghai, seen by the Financial Times, Mr. Dimon said the business was “growing” but in “challenging” conditions, even after a flurry of regulatory approvals. He said he remains optimistic about new growth areas.
“Some parts of investment banking have fallen sharply over the last few years, but I’m not worried about that. There will be ups and downs,” he said, adding that other businesses, including asset management, “will grow over time. You should,” he added.
“We just keep investing wherever we are,” he said.
JPMorgan declined to comment.
This year’s Shanghai conference, attended by Microsoft co-founder Bill Gates, Ken Griffin, president of investment firm Citadel, and Alibaba co-founder Joe Tsai, has been held for two decades but has recently taken place in the shadow of worsening geopolitical tensions between the United States and China.
Amid increased scrutiny from Washington of their operations in mainland China, U.S. companies and multinationals have generally stayed out of the spotlight, while international banks maintain a foothold in China’s vast but largely closed financial markets. I’m having a hard time.
Activity led by domestic brokerages such as CITIC Securities and China International Capital Corp. has also declined amid the economic downturn. Domestic initial public offerings are expected to raise 60 billion yuan ($8.3 billion) in 2024, the lowest since 2009 and down 85% from a year earlier, according to data from Dealogic.
And U.S. banks have been involved in just one China initial public offering this year, according to Dealogic data. In April, Goldman Sachs worked on an $80 million follow-on offering for Shenzhen’s Shenzhen Salubris Pharmaceuticals Ltd.
JPMorgan last year won approval to take full control of a Shanghai asset management company in which it previously held a minority stake, and other banks have received new approvals, including BNP Paribas which set up a wholly owned securities firm last month.
Dimon noted the bank’s rising shareholdings, saying it has 1,200 bank customers in mainland China, many of them multinationals, and that the bank’s investigation into China is “spread across the globe.” Stated.
A range of Chinese companies are now setting ambitious expansion plans abroad, even as international banks struggle to compete in the domestic securities market.The guest list for the conference included financial investment platform Futu Holdings Ltd., restaurant chain Haidiao Ltd., whose overseas operator Superhigh International listed in New York last week, and battery maker CATL Ltd., part of a boom in electric-vehicle production.
Dimon caused controversy in 2021 when he said JPMorgan would outlast the Chinese Communist Party and later apologized twice.
At this year’s event, he said China and the United States have “common interests” in anti-terrorism and anti-nuclear proliferation.
“There’s no reason for China to get involved in a war,” he says. “China has never been expansionist.”
