Fresh from hiring over 40 people to his team, Dani Cotti, global trade executive at JP Morgan, tells GTR how trade finance fits into the bank’s broader growth strategy.
A reshuffling of JP Morgan’s top level management in June heralds the bank’s aggressive expansion plans for all its business lines, including trade finance.
Emerging from the financial crisis as one of the stronger banking forces, and having acquired institutions such as Bear Stearns and Washington Mutual along the way, the bank is looking to further increase its global presence, believing that the growth prospects outside its US home market are significant for all its banking activities.
Such is the bank’s belief in the strength of non-US markets, it has even created a new role; president of international. This role is being taken on by Heidi Miller, previously head of treasury and security services (TSS).
Michael Cavanagh, chief financial officer of JP Morgan Chase, is taking over Miller’s role as CEO of TSS. Doug Braunstein, head of investment banking, Americas, will succeed Cavanagh as chief financial officer.
Miller is now is in the process of coordinating an international business strategy and growth plan, which will involve the acceleration of the bank’s expansion in countries such as China, India and Russia.
This emphasis on global expansion, particularly in the emerging markets, has trickled down to the trade finance division. Dani Cotti, now heading up trade finance operations after moving from RBS last year, is pleased that he is set to enjoy the full support of senior management in his endeavours to increase the bank’s trade business.
Thanks to this support, he has restructured the trade finance business of the bank and recruited over 40 people to date, with more hires likely in the coming months.
“We have embarked on an incredible growth strategy with the full support of the bank,” Cotti comments.
“You will see that in the second half of this year, JP Morgan will be much more aggressive in its global positioning, and not just on the trade side. There is support right through the organisation for all bank products, and you need to have that level of commitment for such a franchise growth.”
Over the past year Cotti has also put into place a new organisation structure designed to aid his expansion plans.
He has set up four regional teams, covering Asia, Latin America, Emea and North America. There are also three new global product teams, one covering traditional trade finance (such as letters of credit (LC), standby LCs, bills of exchange and trade loans), another covering supply chain finance and services, and the final team looking after structured trade finance.
Cotti has also created trade advisory teams, which assist at pre-mandate stage to structure the deal, as well as teams responsible for solution delivery, working at post-mandate stage implementing the deals.
The aim of this new organisation is to free up an expanded sales team as much as possible so they can spend more time with their clients.
To staff this new structure, Cotti has carried out an unprecedented global recruitment drive. And there are some familiar faces taking on top trade management roles, with Cotti calling on old RBS/ABN Amro colleagues for support.
Pravin Advani, previously working at RBS as regional trade head, Asia Pacific, has moved to JP Morgan to take up the role of regional trade executive for Asia.
He replaces Yanti Agustin who has moved to a new role at JP Morgan’s private bank in Asia.
Advani will be based in Singapore, and will lead the regional trade team in Asia, reporting to both Cotti and Simon Jones, regional executive for treasury services in Asia.
Another well known name, Andrew Betts, formerly of RBS/ABN Amro, has taken up the new role of global head of supply chain. His global team will deliver a complete suite of supply chain financing propositions, complemented by a set of top-tier services offerings, including global logistics services, for North America and international clients.
Long-standing JP Morgan banker Mike Quinn is now the global head of traditional trade finance.
Other new management team members include Cort Jacobsen, head of global trade product delivery, based in Tampa, US. He has also previously worked at RBS/ABN Amro, and at Citigroup.
As Cotti is based in London, he has hired Dave Conroy from Deutsche Bank (and ex-Citi), as the regional trade executive for North America. Conroy will at the same time also take on the role as global trade sales head.
Cotti has also made numerous regional team hires, boosting teams in Asia, Emea, Latin America, North America, and Sub-Saharan Africa. However, there are still some more roles to fill in all regions.
Armed with new staff and a fresh business structure, Cotti is setting his sights high, aiming to double the trade finance business by 2013.
To achieve this, he wants to see growth in all key global markets, building up teams in China, and strengthening local teams in India, Brazil and Russia.
“If you ask me what my priority is, it is everywhere. Our strategy is to connect our North American clients in our home markets with our network and help their international activities.”
In terms of the bank’s client base, Cotti is targeting two segments of the corporate market; the multinational companies and their subsidiaries and the large local emerging market corporates. The aim of the bank is not to target mid-caps as other emerging market focused banks tend to do.
These plans fit well with the bank’s broader strategy of becoming a global corporate bank, although Cotti is quick to note that JP Morgan will continue to be a “banker’s bank”, providing services to its financial institution (FI) franchise and to government entities around the globe.
“Our strategy is to leverage on our US dollar FI market share and international clearing market share and attract more trade flow and trade finance business from these clients,” he explains.
He adds that the aim is to grow both the FI and corporate side of business.
Not only is the bank expanding regionally, but Cotti will also build new trade finance products. The trade team already works closely with multilateral agencies such as the Asian Development Bank and the IFC on various supply chain programmes, and is also developing programmes with US Ex-Im and other ECAs. He is developing a supply chain suite as well, strengthening the bank’s receivables financing capabilities.
The revamping of JP Morgan as a more corporate facing international bank, will only be aided by a strengthened trade finance capability, says Cotti.
The argument is that basic trade finance is very often an entry product for a bank to win a certain client or break into a country or region. Cotti adds that once you secure the trade finance business, you then have ample opportunity to cross-sell other bank products.
And so it is expected that trade finance will receive heightened attention as JP Morgan as a whole escalates its global reach.
Standing on the verge of a new era for trade finance at JP Morgan, Cotti remarks: “This is a once in a lifetime opportunity – we are coming out of this crisis in a strong position, and having this commitment and vision from the top of the bank is fantastic.”