JP Morgan taps growth in mid-corporate space

Companies will need to reset operational assumptions amid the evolving economic environment and geopolitical uncertainties, said Doug Petno, chief executive officer of commercial banking at JP Morgan.

Petno’s remark came during his first closed-door meeting with the heads of nearly two dozen Indian mid-sized companies, held here more than a week ago. Several companies are tapping the bank for a range of products, including credit, cash management, risk management and currency risk covers.

“The overarching theme of our conversation is to reset all operational assumptions,” Petno told ET. “Everything’s off the table. It’s a completely different environment from what may have worked in the last 10 years.”

Over three dozen mid-sized Indian companies have become JP Morgan’s clients since it announced its decision to enter the commercial banking space covering India-based clients three years ago. “It will be quite a valuable business for us,” Petno said. “We know we’re doing something right because competition is either doubling down or expanding efforts with mid-sized companies globally.”

India-based companies with annual revenue in the range of $200 million to $2 billion qualify to become commercial banking clients of JP Morgan.

The bank aims to tap these companies in sectors such as IT, healthcare, auto components and chemicals at an early stage and partner with them through their growth journey, fulfilling their traditional lending needs to large-scale capital requirements.

JP Morgan’s India team has curated a list of hundreds of such companies which have strong growth goals and are counted among the top class in their respective industries.

“They’re going to grow, be bigger and larger, and will need to rely on partners to advise them on capital structure ideas, potential M&As, and cross-border payment needs as they enter newer markets globally,” said Petno. The global CEO of commercial banking said “India is well placed for capital formation, new business creation, and certainly telling the world a growth theme”.

In his catch-up with clients, the conversation centred on the cost of capital, economic outlook, financing strategies, managing currency risk, and how they are preparing to take advantage of the disruption in supply chain and ESG (environment social governance) transitions.

Petno said he’s betting on India’s long-term environment because of the country’s sound fundamentals, thrust on infrastructure, a strong labour market, and a stable political milieu. “India is a powerful future economy,” he said but cautioned companies on short-term volatility. “We are long-term optimistic but short-term cautious.”

JP Morgan is driving dedicated efforts to hire talent as it seeks to grab market share.

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