Enhancement seems to be J.P. Morgan's middle name in India where the bank is launching escrow services just six months after it last upgraded its treasury services offering.
Escrow structures provide increased protection around the monitoring of cash balances and investments and help de-risk complex business transactions, including mergers and acquisitions, regulatory payments and capital raisings, by having a third party -- in this case J.P. Morgan -- hold the payees' balance until the transaction closes. The addition of this service in India is part of J.P. Morgan's $1 billion global investment to expand and enhance its treasury capabilities.
"Clients are finding that the use of secured assets through an escrow service can assist in cash collateralising credit usage -- enabling access to greater amounts of liquidity," says Rajiv Jain, India and South Asia head of J.P. Morgan treasury services. "We are pleased to be able to offer this value-added service to both our existing and new cash management and trade finance customers in India."
The addition of escrow complements the bank's existing suite of cash management and trade finance products in India. Last November, the bank implemented what it called its "full suite" of cash management products in the country, including integrated electronic banking, electronic payments and receipts, and trade and structured trade finance solutions.
Since announcing its $1 billion global expansion of treasury capabilities in September 2008, J.P. Morgan has launched its electronic receivables platform, Receivables Edge, in Asia-Pacific, opened image deposit centres in Bahrain, Indonesia and Pakistan, and launched offshore dollar clearing in Asian time zones.
J.P. Morgan's continued enhancement of services in India is unsurprising, since the country is, according to Linda McLaughlin-Moore, managing director for product management and delivery executive at J.P. Morgan treasury services Asia-Pacific, a "focal" point for the bank.
Treasury services' profitability for banks will undoubtedly fuel further expansion of services in coming months as other banking products, notably investment banking and complex derivatives, have been negatively impacted by, first, the credit crisis and now the economic downturn.
In the first quarter, J.P. Morgan treasury services' net revenue was $931 million, up 8% year-on-year.