When Kalpana Morparia decided to end her 33-year relationship with ICICI Bank, it came as a big surprise. Ms Morparia’s relationship with the ICICI group was so strong that even after retiring from the board as joint managing director, she continued as chief strategy and communications officer. Last month, US major JP Morgan, which has been looking for a senior industry person to head its expanding India operations for over a year, ended its search by appointing Ms Morparia as CEO for India. In an interview with ET, Ms Morparia talks about her new role and reasons for joining the firm after 33 years with ICICI. You have been a career ICICI banker. What made you to take the plunge? India is a high-level priority in the firm’s global growth strategy. As I have mentioned earlier, I have commitment from the regional and global headquarters in Hong Kong and New York to accelerate the progress we have made in building a successful Indian franchise. And this, to me, is a phenomenal opportunity. I was close to retirement from ICICI Bank when this opportunity was presented. The final answer came to me in this fashion as to, say, if I have never let gender come in the way of my career, why would I let age come in. I could have opted to take on a semi role or take on the challenge of a full-fledged executive role. The excitement of running the various businesses finally made me make up my mind. What are JP Morgan’s plans for India? The potential for our business in India is huge. The platform is very wide across various businesses — corporate banking, investment banking, markets, assets and wealth management and principal investment as well. I have capital and resource commitment from the senior management team in the region and New York. Growth markets are very important for JP Morgan and India is one of the key emerging markets for us. I am extremely excited about the fact that we already have the foundation of a full-fledged business with all the necessary licences we need in India and that we have already achieved scale — now is the time to build on it further and take it to a completely different level. Which are the areas JP Morgan will look at in India? JP Morgan is looking at growth across all the businesses — markets, principal investing, the entire investment banking space and asset management. Another key line of business is treasury and services business, which covers commercial banking, trade, custody and related services. This actually completes our lines of business and there is no gap in our product offerings. The numerous JP Morgan businesses are at varying scales of operations currently — markets and IB probably having been the longest in the system has scaled much more. The others have been more recent entrants and so growth potential is even greater. In the AMC space, the current mix is much more equity oriented. We would continue that thrust on equity, but we can grow the debt piece as well. On the corporate banking side, we now need to see how we can scale that and in some ways synergise that better with investment banking. Corporate clients would want investment banking products and there would also be a whole lot of investment banking clients whom we can offer commercial banking, treasury services and others. So cross-sell across the client base is another big potential. The NBFC growth would be in line with the growth potential that we are seeing here. How much has the group invested and what are the plans? The overall current capital commitment is about $1 billion. From the global special operations group (private equity), we have invested around $475 million. In the next three years, JP Morgan will invest north of a billion dollars in the Asia-Pacific region, if market conditions allow and the investment would be split roughly equally between India and China. We will take our time during this period of market consolidation to build long-term relationships with companies we’re going to invest with.
What are the plans on the outsourcing front? The global service group is a key strategic initiative started by the bank to leverage local talent and capability and was set up in early 2002 with 500 employees. Today, the service group has grown to over 11,000 employees across several facilities in Mumbai and Bangalore, which makes India the largest operation outside the US and UK with plans to grow further. The banking operations of JP Morgan are limited to a one branch operation. Would you look at increasing the number of branches to all other metros? We would definitely look to do that. But that would be driven purely on the business model which is a wholesale bank, giving commercial banking services. It will be across the top metros. What about retail banking? There are no current plans. Unlike other firms, JP Morgan has not taken any proprietary stakes in any private sector banks and could be using it as a foot in the door strategy. In India, the foot in the door strategy is not even a foot, it’s a toenail. At 5%, you get a toenail and not a foot. We will, of course, continue to look at promising opportunities in this space. What are game plans in 2009? There was this feeling that the group would look at an acquisition to kick-start its retail operations here. The markets are going through a tumultuous phase right now, but the horizon is changing at an amazing pace in India and the future seems very exciting. As far as acquisitions are concerned, for the right target and if the environment permits it, of course, we will look at inorganic growth. Until such an opportunity presents itself, I am not going to slow down on any of the current businesses. We will grow our organic franchise very aggressively.
6 months ago