Pricing for prime brokerage has reached its peak as banks look to meet costs of incoming capital requirements, according to JP Morgan’s chief executive.
Speaking on an earnings call last week, Jamie Dimon said that pricing for prime brokerage and repo services has gone up as a result of the capital rules, but it will not likely continue to increase.
“Capital has been deployed, people have adjusted to the new rules and you’ve seen pricing go up … I wouldn’t count on it [pricing] going up a lot more from there. The markets are going to be competitive at that point,” he said.
Since launching a European prime brokerage offering in 2011, the investment bank has been aggressive in winning market share from key players such as Deutsche Bank and Citi in the region.
The bank is eyeing an aggressive growth strategy across both Europe and Asia.
“We built our platform internationally, Europe we are seeing strong demand for our traffic product. In Asia we’re adding clients. We’ve got the wind to our backs, so it’s an important business to our clients,” added Marianne Lake, chief financial officer, JP Morgan.
“There are some other people potentially not going to be as aggressive and if we can take share, we certainly will.”
JPM’s Dimon sees PB pricing levelling out
The bank is eyeing an aggressive growth strategy in the prime brokerage market.