The decision is a major vote of confidence in London as one of the world’s top finance hubs and follows concerns that the government was not supportive enough of the banking sector. JPMorgan will not build a new block for its use as had been hoped, instead paying £495m for the 31-floor block at 25 Bank Street.
“This acquisition is a long-term investment and represents part of our continued commitment to London as one of the world’s most important financial centres,” said Jamie Dimon, the bank’s chairman and chief executive.
The towering steel and glass block will host JP Morgan’s entire 8,000-strong investment banking division, which is currently spread between four offices.
The move will relieve policymakers, who reportedly met with Dimon to discuss JP Morgan’s concerns over policies such as the bank levy and bonus tax. Mayor of London Boris Johnson said it was “a tremendous coup for London and for the UK, which rightly reflects the prevailing confidence in the capital.”
“Banking is one of the few global industries in which we truly excel,” he said. “JPMorgan’s commitment to London will help ensure the capital retains its position as a banking powerhouse.”
The move also pleased the Treasury, which received £550m from JPMorgan from last year’s bonus tax alone.
Mark Hoban, financial secretary to the Treasury, said the decision would “help to ensure the City’s position as the pre-eminent global financial centre.” “This is excellent news for the City of London, and indeed the UK,” he said.
The bank had planned to build a £1.5bn complex on the Riverside South site but will now just manage the development and pay £74.5m to exit the contract.
TIME LINE | JPMORGAN CAZENOVE
JPMORGAN’S decision to move its 8,000-strong team of investment bankers east to a new European headquarters at Canary Wharf marks a historic break with the past for one part of the business. As part of the move, JPMorgan is to relocate its stockbroking arm, JP Morgan Cazenove, a firm that has maintained its illustrious City roots for nearly 200 years.
The historic Cazenove stockbroking business traces its roots back to 1819, when Phillip Cazenove joined his brother-in-law John Menet’s company. The two men decided to go into business together four years later, and in 1823 the stockbroking partnership was established.
Cazenove has maintained its blue-blooded credentials since, not least thanks to its ongoing reputation as the Queen’s stockbroker. It is famed for its respect for tradition too, from the discreet brass plate outside its Tokenhouse Yard offices to the separate doors for different staff members, from brokers to butlers.
But the highly-regarded broker has undergone fundamental change over the past decade. In April 2001 it officially ended its partnership structure and began preparations to float, but pulled the plan and eventually sold 50 per cent to JPMorgan in 2004 and the remaining half, for £1bn, in 2009.
It has never yet left the City, though it has moved around: from Tokenhouse Yard it moved to Moorgate in 2003 and following the takeover, it moved again to the bank’s offices on Aldermanbury.