The wave of mergers and acquisitions by Japanese companies has produced the biggest winner! JP Morgan's profits in Japan hit a 7-year high
JPMorgan Chase's net profit in the Japanese market reached a seven-year high of 45.6 billion yen, mainly benefiting from a merger and acquisition boom triggered by corporate governance reforms. The bank's merger and acquisition consulting and underwriting business surged, reversing the decline of the previous year. Meanwhile, Morgan Stanley and BNP Paribas saw their profits decline due to market volatility and a drop in commissions. After the Bank of Japan raised interest rates, market volatility intensified, significantly boosting trading activity
The Zhitong Finance APP noted that JPMorgan Chase (JPM.US) surpassed global competitors in the Japanese market last year, benefiting from a trading boom triggered by the country's push for corporate governance reforms.
Regulatory documents show that as of the fiscal year ending March 31, the U.S. investment bank's net profit at its local securities subsidiary more than doubled to 45.6 billion yen (USD 309 million), reaching a new high in at least seven years and reversing the decline from the previous year, primarily due to a surge in merger and acquisition consulting and underwriting business.
In recent years, Japanese companies have accelerated acquisitions and divestitures of non-core assets, creating more opportunities for investment banks. This trend has also intensified the competition for talent among international institutions, from Citigroup to Deutsche Bank.
JPMorgan Chase's profits soared due to the trading boom.
Morgan Stanley's local securities subsidiary recorded revenue of 153.2 billion yen during the same period, partly benefiting from increased bond and equity underwriting and sales revenue, but net profit fell by 2.3% to 31.9 billion yen due to provisions for liabilities in response to increased trading volumes.
The profits of BNP Paribas's brokerage division decreased by 2.9% to 20.6 billion yen due to a decline in commissions.
These figures contrast with the annual reports of other major international banks as of December 31. After the Bank of Japan raised interest rates last August, the country's market experienced the most severe volatility in decades, with the stock market recording its largest decline since the October 1987 crash, and bond prices fluctuating, causing losses for some traders (although the stock market has since rebounded).
Most banks saw a decline in net profits.
Alberto Tamura, president of Morgan Stanley MUFG Securities, stated, "As the Bank of Japan normalizes its monetary policy, the volatility in the government bond market has surged," coupled with a rebound in the stock market, leading to "significantly increased trading activity in Japan's tumultuous autumn."
