J.P. Morgan Private Bank retains leadership position adopting an integrated approach to deliver institutional-quality services
For a third straight year, J.P. Morgan Private Bank is recognised as the Best Private Bank – Overall at the Global Private Banking Innovation Awards 2023.
Global Private Banker evaluates the Best Private Banks at a global, regional and country-level based on unique achievements and business excellence of participating institutions for the period under review. This is documented by those private banks that have demonstrated effective private wealth propositions reinforced through strong financial performance and exceptional client experience powered by digital innovation. Winning private banks led by J.P. Morgan Private Bank possess the requisite operational footprint, technological capabilities and depth of expertise to service the unique long-term needs of its clients.
Financial Performance: maintaining sustainable competitive advantage
JPMorgan’s Private Bank has continued its strong financial performance track record in 2022 with global segment revenues increasing by 16% year-on-year to USD $8.9 billion driven by margin expansion realised due to higher rates. Furthermore, the Private Bank’s pre-tax margin ratio remained at a stable 35% despite lingering adverse operating conditions with slower economic growth, rising interest rates and higher inflation constraining opportunities. The Private Bank has strategically reinforced its advisory capabilities by expanding its private banking bench strength with total number of client advisors increasing by 15% to 3,137.
The Private Bank has constituted an integrated team model framework to consolidate its long-term relationships with clients and ensure a more holistic and consistent client experience. With clients having direct access to a team of specialised advisors, its ratio of clients per advisor remains at 12:1. Importantly, the Private Banking segment’s total client assets steadily rose to USD $1.964 trillion in 2022 from USD $1.931 trillion in 2021. Assets under management marginally fell to USD $751 billion from USD $805 billion in 2021, attributed due to lower market valuations although this was partially offset by client flows to long-term products. In comparison, fellow peer Bank of America Private Bank recorded a decrease in client balances to USD $563 billion in 2022 from USD $625 billion in 2021 facing a similar set of challenges, while posting a 9.5% year-on-year increase in total revenue.
Client experience: leveraging synergies to drive value creation
Given the Private Bank’s ongoing relationship with 50% of the world’s deca-billionaires (excess of USD $10 billion) client advisors are fully empowered to address the institutional and corporate needs of clients facilitating transaction services encompassing equity capital markets, debt capital markets and mergers & acquisitions. In particular, the value generated through “23 Wall” global platform that facilitates cross-partnership between the Private Bank and Investment Bank teams has been instrumental in providing clients with direct access to capital, deal flow and links to private transactions. The platform is currently engaging with 500 plus families and principals, with USD $3 trillion in private family capital being serviced across Asia-Pacific, Europe, Middle East & Africa and The Americas.
Likewise, the Private Bank’s lending specialists are prudently supporting client liquidity requirements through unique lending solutions that include single stock lending, super voting share classes and specialty lending to financial sponsors. Similarly, in 2022 the Philanthropy Centre conducted 64 events across 24 markets to bring clients, NGO partners and subject matter experts to jointly focus on formulating philanthropic legacies for clients as a means for using charitable contributions with purpose and impact.
Similarly, following the acquisition of Campbell Global, the Private Bank is offering clients Campbell Global Forest & Climate Solutions II that partly derives returns from the issuance of voluntary carbon offsets. Meanwhile, the Sustainable Investment (SI) team’s 120 plus strategy offerings covering equities, fixed income and alternatives stands at USD $15.9 billion of assets under management as of September 30th 2022. This is relatively smaller when compared with Swiss-based UBS whose sustainability-focused and impact investing assets are perched at USD $178 billion.
Innovation: Equity-led solutions facilitate growth amid market uncertainty
A key highlight for the Private Bank in 2022 has been its global research platform that is facilitating client access to investment research across all asset classes particularly for equities. The institutional-level quality of resources accessible to clients in the form of the Investment Bank research portal, research experts, webinars, company roadshows, and flagship global events is significant in consolidating client relationships. The Private Bank and Investment Bank collaboration deftly enables equity block trades (including ECM placement), cross trades, desk trades and open market trades.
Moreover, maintaining active communication both internally and with clients during periods of adverse market movements has proven to be exceptionally impactful as client advisors are provided with timely equity alerts while 125 plus internal huddles were conducted to offer context to client advisors on trade recommendations. Externally, more than 450 client meetings, custom portfolio reviews and seminars/ webinars were conducted to guide clients appropriately on making relevant portfolio adjustments. Importantly, core client holdings are reviewed using holding-based analysis coupled, with contrarian bearish calls disseminated as needed to avoid portfolio value deterioration; instances where double-digit alpha return in 2022 were also captured.
The Global Equity Team provides local expertise on the stock picking process enabling clients to access insightful global equity and thematic investment ideas. Indeed, all equity recommendations are tracked and published in the Monthly Review offering clients with much needed transparency on performance evaluation. Consider, 80% of equity recommendation lists outperforming their respective benchmarks in Asia, while equity structured notes revenue recorded a robust 50% year-on-year growth in the second half of 2022 accounting for half of equity-related revenue. Furthermore, the Private Bank has gradually improved its equity derivative margin at 0.35% in March-2023 from 0.25% in June-2022 through optimised product sets, while maintaining cash equity trading margins at around 0.22% during the same period despite competitive pressures.
About
The Global Private Banking Innovation Awards 2023, organised by Global Private Banker, exist to identify, honour, and celebrate the world’s preeminent Private Banks, Family Offices and Wealth Managers that demonstrate elite levels of advisory, unbiased research and bespoke solutions, together with their distinguished individuals’ contribution to client service. Global Private Banker Awards are accolades of excellence and distinction, attributed to outstanding players; and provide unbiased and objective benchmarks for the global wealth industry. The GPB Awards is the world’s most authoritative and transparently judged awards program, and received more than 150 entries from 50 plus participating institutions during the 2023 awards cycle.
