J.P. Morgan has brought out Jeff Zajkowski from New York to take on the job as head of equity capital and derivatives markets (ECDM) for Asia-Pacific, which includes Japan and Australia, sources say. Kester Ng and Doug Howland, who previously shared this job, have been given new roles, they say.
Ng has become chairman of ECDM for Asia-Pacific, which will free him up to focus more on the key markets in Greater China, while Howland has returned to his previous position as head of ECDM for Japan. Both of them will report to Zajkowski, as will Achintya Mangla and David Suen, who retain their jobs as co-heads of ECDM for Asia ex-Japan, and David Gray, who is head of ECDM in Australia. These changes all took effect in December but were only announced internally, the sources say.
The bank has also changed the reporting lines for its equity capital markets division in Asia-Pacific so that it now reports to a global head of ECM, rather than to the head of investment banking in Asia. The idea is to get a more streamlined global ECM team that can work better across regional borders. The head of Latin America ECM also reports to the global head of ECM. The bank appointed London-based Viswas Raghavan, as global head of ECM in November. Raghavan was previously head of international markets.
However, Zajkowski as head of ECM for Asia-Pacific, does also have a dotted reporting line to Todd Marin and Therese Esperdy, who are co-heads of investment banking for Asia-Pacific. Esperdy, who was previously head of global debt capital markets, took up this joint role in October last year. Prior to her arrival, Marin was the sole head of investment banking in the region.
The appointment of Zajkowski — a 25-year industry veteran who joined J.P. Morgan in New York in 2002 — will add to the bank’s ECM resources in the region and the fact that there is now only one head of equity capital markets across Asia-Pacific will also simplify the structure with regard to reporting and responsibilities.
Meanwhile, Ng and Howland will be able to focus their attention on the markets where it is best needed. J.P. Morgan, as many other international banks, had a tough year in Japan last year and clearly hopes that having Howland focus exclusively on this market again — without the distractions of a wider Asia-Pacific remit — will help improve its franchise there.
Ng too is said to have felt that he was being stretched too thin and wasn’t able to spend enough time on China, which accounts for the bulk of the ECM wallet in the region. One source said Ng is expected to spend about 70% of his time on China under the new structure, compared to just 30% before. This will be important since banks are on average making 50% to 60% less per deal across the region today than they did five years ago due to fee compression and the use of more bookrunners on each deal, and to get it right in the most profitable market in the region is absolutely crucial.
In his new role, Ng will also focus on making sure the bank’s efforts in bringing Chinese companies to the international ECM markets are being coordinated with those of its securities joint venture in China. The JV, which is 33.3% owned by J.P. Morgan and operates under the name of J.P. Morgan First Capital Securities, was cleared to start operations in China’s domestic capital markets in June last year.
According to Dealogic data, J.P. Morgan didn’t rank in the top 10 on either Japan or China ECM during the past year, although the China tables include domestic A-share issues and only three international banks do make the top 10 in that country. It ranked eighth across Asia-Pacific.
On Friday last week, J.P. Morgan reported a 23% year-on-year drop in fourth quarter net profit to $3.7 billion, mainly due to a sharp decline in trading revenues. The investment bank saw a drop in revenues to $4.4 billion from $6.2 billion a year earlier as investment banking fees fell 39%. Net profit more than halved to $726 million from $1.5 billion.
Zajkowski has a background in derivatives and equity-linked origination. He started his career at Goldman Sachs in 1987 and before joining J.P. Morgan he also worked for about a year at Merrill Lynch.