Tom Sims

FRANKFURT (Reuters) – JPMorgan Chase & Co (NYSE:) plans to make further inroads in Germany by targeting more of the medium-sized firms that form the backbone of Europe’s largest economy, executives at the U.S. bank said.

Established lenders, such as Commerzbank and UniCredit HypoVereinsbank are facing a major challenge. Deutsche Bank (ETR) – These companies have been dominating a market so-called Mittelstand for many decades.

JPMorgan has grown to be one of Germany’s most important advisory banks with a 14% average market share for mergers and acquisitions in Germany between 2016-2021. Dealogic data indicates that this is double its previous share.

Bernhard Brinker leads the charge. With a base of about 75 clients, he has doubled the staff’s number to approximately 15 to 20.

We have plenty of room to grow our business. We’re now well placed to grow the business 10x in the medium-term, having laid the foundation,” Brinker stated, speaking of the revenue and clients.

JPMorgan has taken on bankers from Deutsche Bank (NYSE:), ING, and Lazard since Brinker launched its push three-years ago.

Brinker explained that they are still hiring…We’re constantly looking for the best talent.

This team also includes Switzerland and Austria. JPMorgan has not yet posted any job openings. However, it declined to provide further details on future growth.

INTENSE COMPETITION

There will be fierce competition. The expansion also comes at a moment of uncertainty for German companies, who face energy shortages as a result of Russia’s invasion in Ukraine.

Jan Kupfer was a member the HypoVereinsbank’s Board. In a statement, Reuters said that HypoVereinsbank plans to increase its corporate clients.

He said, “Competition remains fierce in corporate customer business but we currently see a high demand from Mittelstand businesses for advice and funding.”

Deutsche Bank claimed it was the largest player in the Mittelstand industry, while Commerzbank maintained its strong position.

Germany’s export-oriented economic system is dependent on Mittelstand companies, which according to some definitions employ fewer 500 people and generate less than 50,000,000 euros per annum in revenues. Many remain family-owned.

JPMorgan is focusing on the larger Mittelstand businesses with revenue of 250m to 2billion euros annually, as well as those that are international.

JPMorgan acquired Germany’s WEPA Group (which makes paper towels and toilet paper) as a client.

WEPA had previously issued its bonds using Deutsche Bank or HSBC. In 2020, it added JPMorgan to the group.

WEPA responded to Reuters by writing that JPMorgan was the best bank for internationalizing a German business because JPMorgan has a strong presence in Germany.