ON the morning I meet Viswas Raghavan, JP Morgan’s European head of investment banking, he is buzzing.
The spectacular view from his office is of the docklands and the City of London but his gaze is fixed on the television, which is placed along one of the walls.
Suntory’s £1.35bn bid to buy Lucozade and Ribena from GlaxoSmithKline (GSK) is just being announced on the ticker tape at the bottom of the screen and Raghavan is excited. JP Morgan has been advising GSK on the deal, having been an adviser to Suntory on a recent deal too.
“You’re either reading the news or making the news, that’s what we tell CEOs who are watching the current wave of industry transforming deals,” he says, clearly delighted that his bank is habitually doing the making bit.
JP Morgan is always there or thereabouts when it comes to advising on the biggest corporate deals but it’s true to say that even by its own high standards it is going through a bit of a purple patch right now. Wallet share has grown from 6.2 per cent this time last year to 7.7 per cent now in a market that is only gently rising.
Aside from the GSK deal the bank is also busy advising Verizon on its $130bn purchase of Vodafone’s stake in the US joint venture between the two groups and on Nokia’s sale of its handsets to Microsoft. It also worked on behalf of Invensys on its £3.4bn sale to Schneider Electric a few weeks ago.
Raghavan says investment bankers are seeing the first signs of a renewal of merger activity as the ex-growth western companies try to figure out a way of growing through acquisition. And they’re looking to move while interest rates are still low. “While the improving economy is good impetus for coming deals, liquidity is not going to be abundant and cheap forever.”
On the fifth anniversary of the downfall of Lehman, Raghavan says that JP Morgan has weathered the financial crisis better than most. “We have been profitable every single quarter,” he adds. “And across all our business lines, we are continuing to benefit from a customer flight to quality as marginal players retract or retrench.”
In the run-up to the crisis, he says that almost everyone was caught up in the euphoria of a raging bull market, so there were many casualties when the bubble burst.
“Everyone from the banks, the policymakers, the asset managers and the consumers had a part to play. The pendulum had swung too far and almost everybody overstepped the line.
Now, there’s been much in the way of new regulation and ethos, but he accepts that the industry as a whole has suffered in terms of reputation. “It’s unfortunate that all banks have been tarred with the same brush when there are some stellar banks and some not so great. Some people question whether the industry has lost some of its charm and is less attractive than it was pre-crisis and while the industry has taken some knocks, I would disagree.
“We are still seeing the brightest and the best flock to our ranks. They are driven by a desire to work, learn and thrive in the midst of the global economy, delivering cutting-edge strategy and financing solutions to institutions worldwide and making a real positive difference – few other career experiences can match that.”
JP Morgan has not always had an unblemished record, of course, with Spanish police recently arresting two of the bank’s former traders in connection with wire fraud and conspiracy to falsify books and records related to trading losses of around $6bn. The trades were executed by Bruno Iksil who was nicknamed the London Whale for his large bets on derivatives markets.
“It irritates us that we let this happen,” says Raghavan. “It’s a bit like the perfectionist Djokovic serving a double fault. We train and train to avoid this kind of transgression and on this occasion we let ourselves and others down. But we have learned from this, we are wiser for it and have taken a number of actions to strengthen our compliance and controls on the back of it.”
Earlier this year, JP Morgan combined all its investment banking and treasury services activities, including JP Morgan Cazenove, under a single banking umbrella, headed by Raghavan. “The effectiveness of this combined platform has been powerful,” he says, adding it allows the bank to cover clients from the board, CEO, CFO and treasurer down to finance and operations “in a super joined-up way across the globe”.
Raghavan sees a strong future for London’s financial services sector. “The City is a natural magnet for international markets and that attraction will simply not wane.” But he does warn that complacency, anti-City rhetoric, excessive regulation and increased capital requirements could all take their toll. “Regulation had to be tightened. We welcome it and are in constant dialogue with regulators about the possible good and adverse effects,” he says, adding that there has already been a clean-up of practices and personalities.
Is it just the money that spurs the elite of the graduate courses to head for the financial services sector? I asked him finally. No, not just that, he said.
“This job is only for people who thrive in a fast paced environment, working on ‘mission critical’ assignments for global clients,” he says.
He adds: “Nokia’s sale of its handsets business to Microsoft for $7.2bn is a defining event in that industry. Verizon purchasing Vodafone’s stake for $130bn is the second largest M&A transaction ever...we get a buzz out of what we do for our clients.”
And with that he glances at the TV screen, to see if his bank’s deals are on again.
CV VISWAS RAGHAVAN
Studied: Graduated from the University of Bombay, India with a BSc in Physics. He then took a postgraduate degree in electronic engineering and computer science from Aston University, UK.
Career: He is currently head of banking for Europe, the Middle East and Africa at JP Morgan’s Corporate & Investment Bank. As head of banking, he leads a team of bankers across the region responsible for corporate finance, mergers and acquisitions and transaction banking.
He joined JP Morgan from Lehman Brothers in 2000.
Hobbies: His first love is cricket and he’s recently been able to combine this with his work life by organising an annual cricket competition at the hallowed Lord’s Cricket Ground in London.
Clients are invited for the occasion from all over the globe as well as professional players like former England captain Andrew Strauss.