JPMorgan Asia private bank sees post-boom mergers

By Jeffrey Hodgson

HONG KONG (Reuters) - Private banking in Asia should boom for the rest of the decade, if not beyond. But when the easy money stops flowing, weak players will find themselves squeezed into hooking up with big financial institutions.

At least, that's what Michael Fung, chief of the Asia private banking arm of JPMorgan Chase & Co. (JPM.N: Quote, Profile, Research, Stock Buzz), is thinking.

"Right now because the pie is still growing, everybody still has something to eat," Fung said in an interview with Reuters. "But eventually, something will slow down and that day you will see some consolidation."

Major clients on average have relationships with four private banks, allowing them to shop around for every product and service, he said. In time, Fung said this could hit smaller private banks, who may be pressured to merge or be acquired by bigger players. Should other private banks become available, JPMorgan would definitely be interested in acquiring them, Fung said. But he said such deals have to make sense, and he noted few have come to market.

"This is something we always look at as a firm. It's the firm's culture that any business in any region should always be very much aware of any acquisition opportunity," he said.

Asia already accounts for about a fifth of the $310 billion in client assets that JPMorgan Private Bank holds globally. The bank estimates it has relationships with about 70 percent of the individuals on the most recent Forbes list of the 40 richest people in Hong Kong, Macau and Taiwan.

"In term of business, we're growing double digit like the industry trend," Fung said.

"We do have a very strong growth agenda globally, but especially in this part of the world."  Continued...