MUMBAI, Sept 24 (Reuters): JPMorgan, the largest bank in the US, is bullish on India and Japan within Asia but is also keen to allocate resources towards Southeast Asia, which is benefiting from the "China Plus One" strategy, a top official at the bank said.
"India is still firmly in the top three, possibly top two in Asia, together with Japan. Growth in India is actually very broad-based," Sjoerd Leenart, JPMorgan's Asia Pacific CEO, said in an interview on Monday.
"We are investing on all fronts in India. We're adding bankers, we're putting more capital into the business and we're building capabilities such as technology investments to service new segments of the market," he added.
JPMorgan expects its commercial banking business, which is focused on mid-sized companies, to grow as much as 30% in India over the next few years, Leenart said.
India would need to further build its manufacturing ecosystem and ensure scalability to gain from the "China Plus One" strategy which has currently largely benefited the Southeast Asian countries, he added.
China Plus One is a strategy that businesses are following to diversify investment and supply chains from China into other countries.
"In India this next leg will to an extent be about becoming a manufacturing hub, creating blue collar jobs, and that's an opportunity, but it's almost a necessity for India," Leenart said.
"So if that strategy doesn't work, then India may not do as well as people expect. That's probably the hardest to execute," he said, adding he still expected India could succeed.
On Japan, Leenart said with interest rates now positive, clients have become interested again and from a corporate activity and rates view, the country is full of opportunity.
JPMorgan's business in China has been growing significantly and Leenart said despite concerns about slow economic growth there, the country cannot be ignored.
"We're actually very excited about what we have in China. We have all the capabilities, and we're looking to maximize the opportunity that we have with domestic clients and international clients. It's been growing actually nicely."
