JPMorgan Chase is expanding across India following approval from banking authorities in the country.
Reports on Friday (July 1) said JPMorgan received clearance to open three new branches in the nation. In a statement, the bank’s chief executive for South and Southeast Asia, Kalpana Morparia, said JPMorgan has “a great commitment to this country.”
The three new branches will add to the company’s existing single branch, located in Mumbai. According to Morparia, expanding its presence is an effort for JPMorgan to strengthen its position among multinational corporations in India, as well as local firms trading internationally.
Reports pointed to the recent departure of other U.S. and foreign banks from India. Only a “handful” of the 46 foreign financial institutions that have launched operations in India have managed to build a “sizable business,” reports said.
And last year, UBS Group and Morgan Stanley both retreated from India by surrendering their commercial banking licenses. Goldman Sachs also decided to hold back from its previous plans to enter India’s commercial banking sector, reports said.
Analysts said some foreign banks have reduced their India presence after economic growth failed to live up to expectations in the country. Others pointed to local regulations that require banks to allocate a portion of their lending activity to borrowers from “economically weaker backgrounds,” according to The Wall Street Journal, which makes lending expensive for FIs.
JPMorgan Chase recently surpassed analyst expectations with its most recent quarterly earnings report. Overall revenues decreased by 3.4 percent year over year, the company said in April. Rising bad loan provisions are proving costly to the bank, with JPMorgan setting aside $1.8 billion in the first quarter to cover these costs, reports said.