Ukraine war spurs demand for fundraising: JPMorgan

JPMorgan Chase & Co sees greater demand from companies for liquidity because of volatility from Russia’s invasion of Ukraine, the lender’s global head of corporate banking Sjoerd Leenart said.

The biggest US bank is talking with a number of clients about incremental fund-raising, while also navigating “very complex” sanctions which are difficult to implement, Leenart said in an interview with Bloomberg Television.

“It’s been a very busy period, unwinding transactions and certainly stopping any new business,” he said. “We’ve been talking very actively with clients about what exactly is allowed, what’s not allowed, how to unwind trades, by when, which payments can be made and which payments cannot be made.”

The comments offer an insight into how the Wall Street bank is handling the financial turmoil spurred by the war. Volatility soared last quarter, with commodity markets - where JPMorgan is one of the biggest players - an area of particular upheaval. The bank’s first-quarter results were marred by a US$524 million loss tied to the market fallout.

That came after the bank in March joined firms including Goldman Sachs Group in pulling back from Russia, saying that it is engaging in limited activities in the country. Chief executive officer Jamie Dimon wrote in his annual letter earlier this month that while JPMorgan’s direct exposure to Russia is limited, the New York-based firm could still lose about US$1 billion over time.

On China, which is currently grappling with a Covid outbreak and an unprecedented lockdown in Shanghai, Leenart said it remains a powerful economy.

“The hope is still that they will come out of this, they have obviously taken a slightly different approach than the rest of the world,” he said. President Xi Jinping has made clear he is sticking with Covid Zero, defending the policy again at the Boao Forum for Asia on Thursday. (Apr 21) 

Chinese companies still have access to funding, but it’s become more complex to navigate than last year, Leenart added.