JPMorgan Boosts Canadian Corporate Support with $1.5-Trillion Investment Commitment
JPMorgan Chase & Co. JPM-N is expanding its US$1.5-trillion economic security and resilience initiative to Canada, aiming to boost key sectors such as energy, defence and critical minerals with billions of dollars in new financing and support.
The world’s largest bank announced its Security and Resiliency Initiative (SRI) in October last year. The 10-year pledge aims to reach its lofty, trillion-dollar-plus target by steering a broad range of financing and support for companies to five key sectors. The bank will increase its lending, help clients raise more capital and has earmarked an initial US$10-billion of its own money to make equity investments.
JPMorgan chairman and chief executive officer Jamie Dimon has framed the initiative as an urgent effort to build up critical industries and supply chains in the United States in an increasingly unsafe world. The bank has since expanded the SRI to include investments in Europe and Britain.
Now the country’s Canadian arm is joining the effort, led by JPMorganChase Canada CEO David Rawlings, who oversees a team of bankers in Toronto, Montreal, Calgary and Vancouver. He will work with the bank’s clients, governments and organizations in the private and public sectors to expand the unit’s cross-border banking and advisory business.
“There’s just so much that we can do to help Canadian companies get on a different growth track, and that’s going to be a huge focus of this initiative,” Mr. Rawlings said in an interview.
The bank is not making any specific allocation to Canada within the US$1.5-trillion financing envelope dedicated to the initiative, which will flow to the best opportuunities. But the SRI commits JPMorgan to about “50 per cent more than we would normally have done” in lending, capital raising, and direct investments across its global footprint, the initiative’s global head Jay Horine said in an interview.
So far, JPMorgan has deployed US$122-billion of its US$1.5-trillion target, and made contact with 4,000 companies around the world that fit the SRI’s focus areas, including existing clients.
“The level of interest from outside the U.S. has been remarkable,” he said. “And this is early days. We’re just getting started.”
The bank expects to deploy billions of dollars to Canada over the coming years, increasing its activity in the country in step with Ottawa’s push to attract more investment and build major projects to upgrade national infrastructure. JPMorgan expects the SRI’s focus areas to line up well with Canada’s energy, mining and defence sectors, and its integration with North American businesses.
JPMorgan is also a key supporter of the new, global Defence, Security and Resilience Bank, which will have its headquarters in Canada and is backed by Canada’s six largest banks.
Canada is “rich in talent, abundant resources and is home to companies at the forefront of critical industries,” Mr. Dimon said in a statement. “By extending SRI to Canada, we’re strengthening the vital industries and supply chains that underpin North American economic resilience, which is essential to shared prosperity and collective security.”
There has been pressure on major Canadian pension funds to invest more in Canada, and on the Big Six banks to lend more to small and medium-sized businesses to support more economic growth and innovation. Last week, the head of Canada’s banking regulator cited JPMorgan’s SRI as an example to follow and urged Canadian banks to “step up and make the same commitment to Canada.”
The SRI has five areas of focus: Supply chains and advanced manufacturing, defence and aerospace, energy independence and resilience, frontier and strategic technologies, as well as pharma and health technologies.
JPMorgan plans to increase its lending to those sectors and facilitate capital-raising by companies, including through the suddenly hot market for initial public offerings).
In addition to its pledge to put its own money to work, JPMorgan has hired some “non-traditional” staff such as experts in supply chains, government and consulting to assist clients.
And the bank is having more frequent discussions with policy experts and lawmakers in an effort to influence policy changes that would encourage investment, speed up permitting for projects and improve education and training programs.
“What’s different, I think, is the level of interaction we are having with governments is just accelerating under this initiative,” Mr. Rawlings said.
That has included closer contact with Prime Minister Mark Carney’s government, which is attempting to reshape Canada’s business climate as part of a goal to attract $500-billion of private-sector investment over five years. Mr. Carney and Mr. Dimon took part in a roundtable of business leaders in New York in late May.
“Canada’s investment climate has been weakened over the last decade, and we are thrilled to see this government focused on increasing both foreign direct investment, as well as capital expenditures from domestic companies within the country,” Mr. Rawlings said. “And we think that is a really important part of the next leg of growth for Canada.”
JPMorgan’s business in Canada has nearly doubled its revenue over the past five years and increased its headcount by one-third, most of whom work directly with clients. In the process, the bank has added to its capacity to help companies from abroad investing or doing business in Canada.
“We’ve sort of gotten ahead of that trend that we hope accelerates,” Mr. Rawlings said.
This article was first reported by The Globe and Mail
