JPMorgan Sets Sights Overseas

By ERIC DASH

Published: June 22, 2010

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Heidi Miller has a new job.

The bank’s chief executive, Jamie Dimon, announced a series of management changes toward that end on Tuesday,
appointing one of his closest lieutenants to a new position with a
mandate to start a global corporate banking business and scout out
opportunities in Europe, Latin America and Asia.

The executive, Heidi G. Miller, was named president of the bank’s international operations and chairwoman of a new global advisory
committee made up of about a dozen senior bankers and regional business
heads. The new role should further cement Ms. Miller’s standing as one
of the most powerful women on Wall Street.

Ms. Miller’s appointment set off other changes to the bank’s organizational chart. Michael J. Cavanagh, JPMorgan’s chief financial
officer, will take over for Ms. Miller as head of the bank’s Treasury and Securities division, which focuses on
back-office recordkeeping and securities lending for big institutional
investors like hedge funds and pension funds.

Douglas L. Braunstein, 49, the head of investment banking for the Americas, will succeed Mr. Cavanagh, 44. Mr. Braunstein’s successor has
not been named.

Mr. Dimon, 54, said in a brief telephone interview on Tuesday that he had been contemplating the changes for several months, with an eye
toward developing a roster of younger managers that could someday
succeed him.

Although James E. Staley, 53, head of JPMorgan’s investment bank, is widely believed to be Mr. Dimon’s most likely successor, Mr. Cavanagh’s
star rocketed during the financial crisis, when he helped engineer the
acquisitions of Bear
Stearns and Washington
Mutual and steer the bank through months of turbulent markets.
Since then, the bank’s performance and stock price have stood out among
its peers.

Mary Erdoes, 42, who runs JPMorgan’s asset management division, and Charles W. Scharf, 45, the head of its retail operations, are also
viewed as potential candidates down the road.

At the same time, Mr. Dimon has made expanding overseas a priority. JPMorgan Chase gets about a quarter of its revenue from international
operations and has few retail branches outside the United States. Even
its global investment banking and treasury services businesses focus
mainly on Western Europe.

Other big banks, like HSBC and Standard
Chartered, have much stronger toeholds in emerging markets. Citigroup,
where Mr. Dimon and Ms. Miller rose through the ranks together, derives
nearly 60 percent of its revenue from overseas and has had retail
operations in China and India for decades.

With growth trends tilting toward the emerging markets and the prospect of tighter regulation from Washington, Mr. Dimon sees untapped
opportunity. Analysts project that the growth rate of banking will be
two to three times faster in emerging markets than the United States.

“We have got to invest locally, look at clients globally and look at new markets,” he said in the interview. “We are going to get the whole
company behind it.”

Mr. Dimon, who spent the last two weeks hopscotching across China, India and Russia, had been laying the groundwork for international expansion
for some time. A few years ago, he assigned two top lieutenants to scout
out potential consumer banking opportunities overseas. He created a
network of global advisers, including Tony Blair,
the former British prime minister, and established a partnership with a
buyout firm started by several former Citigroup colleagues to hunt for
overseas acquisitions.

The global credit crisis postponed those plans. But at a meeting of the bank’s top executives on Sea Island, Ga., last summer, Mr. Dimon
committed to spending billions of dollars in the coming years to bolster
the bank’s overseas business. The bank plans to focus on a dozen or so
emerging markets, Mr. Dimon said, including the so-called BRIC
countries, Brazil, Russia, India and China, as well as places like
Vietnam, Indonesia, Malaysia, the Philippines and parts of Africa.

Mr. Dimon has already made a handful of deals to add to the bank’s international portfolio. Earlier this year, it bought a commodities
trading unit from the Royal Bank of Scotland. It plans to buy Gávea
Investments, a Brazilian asset management firm. And last week, it
announced an investment banking joint venture with First Capital
Securities of China.

But the centerpiece of his immediate strategy is to create a global corporate bank that can serve multinational clients. Mr. Dimon said he
hoped to assign global corporate banking responsibilities to employees
in the investment banking and treasury services units, with Ms. Miller
in charge of forging cooperation among business lines and regions.

“If she comes up with a great plan, we will put a lot of money behind that,” Mr. Dimon said.

The global bank has a loose structure for its 400 employees, with spaghettilike reporting lines that some senior executives privately say
could pose significant challenges. Mr. Dimon says he worries about that,
too, but has concluded that having an overarching head of international
operations would lead to more accountability. “The intent of this is to
get less bureaucracy,” he said.

The new role for Ms. Miller, who has a doctorate in Latin American studies, puts her in charge of a far smaller business than the treasury
services unit, but one that could influence the bank’s long-term
prospects.

A longtime member of Mr. Dimon’s inner circle since she served as chief financial officer of Citigroup while he was president, Ms. Miller joined
him again to help turn around Bank One, which would later merge with
JPMorgan. (She had an eight-month stint as Priceline.com’s financial chief during the height
of the dot-com boom in 2000.)

Mr. Cavanagh, meanwhile, had been angling to run one of the bank’s major businesses even before the crisis. Mr. Dimon pressed him to stay on as
financial chief. Many see his job move as part of Mr. Dimon’s strategy
of grooming well-rounded managers.

“I always thought it makes sense to have corporate and line-of-business experience,” Mr. Dimon said. “It just gives you a better understanding
of the firm.”..