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JPMorgan Has Its Sights Set On The German Mittelstand As An Economic Engine!!
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Expansion Into Germany
JPMorgan Chase & Co intends to expand its presence in Germany by focusing on the medium-sized businesses that are the backbone of Europe’s largest economy, according to bank executives.
Established lenders including Commerzbank, UniCredit’s HypoVereinsbank, and Deutsche Bank, which have dominated a congested market for so-called Mittelstand enterprises for decades, may be challenged by the move.
According to Dealogic data, JPMorgan, which has its European Union headquarters in Frankfurt, has grown to become one of Germany’s largest advisory banks in recent years, with an average 14 percent market share in mergers and acquisitions for German firms from 2016 to 2021, more than doubling its share over the previous six years.
Bernhard Brinker, who has grown a client base of over 75 and expanded personnel to around 15 to 20 individuals in the last year, is leading the charge.
“There is plenty of room for us to expand the company. We’re well-positioned to grow the business tenfold in the medium term now that we’ve established the groundwork “Brinker was referring to client numbers and revenue.
JPMorgan has hired bankers from Deutsche Bank, ING, and Lazard since Brinker began its campaign three years ago.
“We’re still looking for people…
We’re always on the lookout for exceptional talent “Brinker explained.
There are presently two job openings for the team, which also covers Austria and Switzerland, although JPMorgan declined to elaborate on its future staff expansion intentions.
Strong Competition
The expansion will encounter fierce competition, and it comes at a time when German businesses are facing energy shortages as a result of Russia’s invasion of Ukraine.
HypoVereinsbank’s board member Jan Kupfer said in a statement to Reuters that the Munich-based lender also intends to expand its business clientele, “, particularly for the Mittelstand.”
“We are currently seeing a tremendous demand for assistance and financing from Mittelstand enterprises,” he said.
Deutsche Bank claims to be the largest participant in the Mittelstand sector, while Commerzbank claims to have a prominent foothold in the sector.
Germany’s export-oriented economy is reliant on Mittelstand businesses, which by some definitions have fewer than 500 employees and annual revenue of fewer than 50 million euros. Many are still run by families.
JPMorgan is targeting larger Mittelstand companies with annual revenues of 250 million to 2 billion euros, as well as those with a global emphasis.
WEPA Group, a German toilet paper, and paper towel manufacturer are one of JPMorgan’s new clients.
WEPA formerly issued bonds through Deutsche Bank and HSBC, but in 2020 it enlarged the partnership to include JPMorgan.
“JPMorgan is the appropriate bank for a German company’s internationalization since JPMorgan has a strong presence in Germany,” WEPA stated.
Further
JPMorgan is to help boost its private banking operations in Asia in order to better serve mainland Chinese clients.
As part of its regional expansion strategy, the company hired 42 new staff in Hong Kong last year to service mainland customers.
JPMorgan hired two top executives to update its online investment product in September of last year, according to the Wall Street Journal.
And this year, it plans to grow its staff headcount in Germany by about 25%.
