JPMorgan Chase CEO and chairman Jamie Dimon addressed the firm's plans to drive global revenues by expanding its international commercial-banking business on the bank's fourth-quarter earnings call Friday.
Dimon estimated that JPMorgan could eventually add more than 1,000 new clients overseas as it looks to eventually generate $1 billion of international revenue via the commercial bank, according to its fourth-quarter presentation.
While the process is still in the early days, Dimon said the bank has already begun to reap some rewards by putting additional resources into nabbing new business in international markets. He cited Asia as being a region where the bank had one of its best years ever in 2020.
"It's mostly expense right now. We added bankers and products and services and legal and compliance," said Dimon of the commercial bank's international expansion on an call with analysts.
"We've been adding clients. We're quite happy with it," he added.
Dimon also took the opportunity to poke fun at a former colleague and current competitor.
"But tell Charlie, 'You can't imitate me on this one,'" Dimon said, referring to Wells Fargo CEO and one-time protege Charlie Scharf.
Scharf, who spent nearly a decade at JPMorgan Chase, is aiming to expand Wells Fargo's presence in investment banking, an area the bank hasn't traditional had a strong foothold, Bloomberg reported in early January.
'This is an extraordinary opportunity to hire bankers '
In February 2019, JPMorgan announced plans for growing its commercial bank internationally, naming Andrew Kresse head of its corporate client banking and specialized industries. Kresse's mandate is to build out local teams in Europe and Asia-Pacific to help non-US headquartered customers with a variety of services, including credit, hedging, and investment banking.
JPMorgan's CFO Jennifer Piepszak, who was also on the earnings call, elaborated on JPMorgan's international aspirations for its commercial bank.
Specifically, Piepszak cited the fact JPMorgan's corporate investment bank (CIB) has already established roots in many of the regions, which could help the bank's efforts on growing its commercial bank.
"Just from an expense perspective, it's important to remember on the international front that we're riding existing rails that are already there in the CIB," Piepszak said on the call. "So this is an extraordinary opportunity to hire bankers and we already have the infrastructure. It's not the risk you might think from an expense perspective."
Success at JPMorgan's commercial bank division, as well as a banner year in fixed-income trading, helped drive record profit at the bank in the fourth quarter and in 2020.
JPMorgan reported that gross investment-banking revenue from commercial banking clients rose 22% year-over-year to $3.3 billion. Its long-term gross revenue target for the division is $4 billion, with $1 billion via international channels.
JPMorgan is also in the midst of a major push to build out its wealth-management team, albeit in the US, by hiring more than 4,000 advisors over the next four to five years, as Kristin Lemkau, the bank's US wealth management chief, told Insider in October.
The bank's desire to expand its commercial bank internationally comes as others look to move into the space.
Goldman Sachs has spent the past few years building out its own commercial bank. In December 2020, Goldman, along with Citi, secured a partnership with fintech giant Stripe to help its rollout of bank accounts to business customers. The tie-up will mean Stripe customers have access to Goldman's commercial-banking services like interest-bearing bank accounts and debit cards.