JPMorgan to expand 'volatile but dynamic' Latin American operations

JPMorgan Chase & Co. announced on Tuesday that it plans to hire more than 500 people in Latin America after it was revealed that it raked in more investment-banking fees than any of its competitors in the region last year. 

“With the exception of fixed-income markets, we had the best year ever in 2021 for all the businesses we have in Latin America,” Alfonso “Poncho” Eyzaguirre, the bank’s chief executive officer for Latin America and Canada said in an interview. “And we want to continue growing.”

However, other Wall Street banks – including Goldman Sachs Group Inc. – have also benefitted from strong venture-capital investments in technology firms throughout the region. Brazil’s booming equity capital markets have been instrumental in the banks’ regional growth in asset management, global markets, and investment banking, Bloomberg reported.

“Brazil was the driving force behind the increasing volumes in the region, representing two-thirds of the investment-banking wallet, and we were able to gain market share there even considering the presence of very strong local competitors,” Eyzaguirre said. 

“For 2022, we believe the region will have a challenging year, as Covid is not going away, the Fed is expected to taper and raise rates, local central banks are also increasing rates, and we will have our own idiosyncratic Latin America issues, mostly on the political front,” he added. 

Yet elections in Brazil and Colombia, coupled with the outcome of Chile’s constitutional convention, are expected to raise volatility across Latin America. Eyzaguirre believes investors are ready to weather any potential storms.

Even if the equity capital markets in Brazil shrink, private equity investors may want to increase their exposure in the nation, he noted, adding, “with diversification in businesses and geographies, you can weather these cycles and do well.”

For Eyzaguirre, Mexico – a “sleeping giant” – is a good example of this as he is convinced it stands poised to recover its relative importance in the region’s investment-banking industry, although it represented a mere 11 percent of the fee wallet in 2021.

“The tech industry is emerging there,” he said. “We are hoping to see something similar to what happened in Brazil, where it exploded.”

About 450 of the new hires will be for the hub in Buenos Aires, where JPMorgan already has 2,400 employees serving the corporate- and investment-banking functions globally. 

Latin America “is volatile, but it’s dynamic with a ton of opportunities,” Eyzaguirre said.