By Tom Sims
FRANKFURT (Reuters) -The U.S. bank JPMorgan has expanded in Dubai as part of a broader push to grow and do more business with medium-sized companies in the Middle East and beyond, an executive told Reuters.
The move, which has not yet been reported, is a challenge to competitors such as Citigroup, and comes after JPMorgan recently devoted more resources to coverage of so-called midcaps in Austria and Poland. The bank is also now weighing increasing its presence in Turkey.
Midcaps give JPMorgan another revenue stream beyond its traditional focus on the biggest blue-chip firms.
“There’s a global focus on doing more in the midcap space,” Stefan Povaly, London-based co-head of corporate banking for Europe, the Middle East and Africa, said.
JPMorgan has relocated Tushar Arora, a banker who has been with the U.S. lender for more than a decade, from London to take up a Dubai role as the first in a team to focus on smaller venture capital-backed companies.
“The Middle East is of course a priority … This is the first step for an expansion into the midcap space,” Povaly said.
Global financial firms have been increasingly setting up shop in the United Arab Emirates to tap oil wealth and growing markets.
Citigroup first opened in the UAE in 1964, and added commercial bank activities in 2007.
Alex Stiris, head of Citi’s commercial banking in Europe, the Middle East and Africa, told Reuters that Citi sees the UAE as a location with one of the greatest opportunities for increasing market share and that his bank has an ingrained “natural advantage”.
“We have seen more competition come into the UAE,” he said.
“Obviously the more competition, the more we have to be on our tiptoes. So it worries me to some extent,” he said. “We can’t rest on our laurels.”
Elsewhere, JPMorgan is in the early stages of evaluating a move to increase covering midcaps in Turkey.
“Over time, we could look to hire bankers dedicated to midcap clients in the country,” Povaly said.
The activity follows a push to Poland with the hire of Marcin Pietrucha from Santander, who has built a team based in Warsaw and other hubs.
In parallel, JPMorgan is seeking more midcap business in Austria, headed by banker Philippe Bull based in Frankfurt.
JPMorgan has a large presence in Germany, in part for coverage of the country’s medium-sized Mittelstand firms.
JPMorgan has been on an expansion course in Europe. The bank this week officially opened an office in Berlin with space for 400 staff ahead of its launch of a digital retail bank.
In part a reflection of its size, JPMorgan last week was slapped with the biggest-ever fine by German financial regulators for deficiencies in money-laundering prevention.
(Reporting by Tom Sims; Editing by Andrew Heavens)
