Jamie Dimon’s Worst Nightmare: JPMorgan Chase Loses Custody
Jamie Dimon must have woken up on Monday morning mad as hell when he found competitor Citigroup (NYSE:C) had won a contract to deliver custody and securities lending services to Norway’s huge $866 billion sovereign oil wealth fund, Norges Bank Investment Management, instead of his firm, JPMorgan Chase (NYSE:JPM).
Citi said in a statement that the fund is “believed to be one of the largest of its kind in the world,” and according to The Financial Times, the deal will be for seven years. The bank will take hold of NBIM’s $866 billion in assets adding to its own $12.8 trillion in assets under custody and subcustody, according to Bloomberg Businessweek. Age Bakker, COO for NBIM, believes that Citi have demonstrated itself to be the best amongst all the financial institutions out there.
“Citi has demonstrated a commitment to the custody business through its proprietary sub-custodian network and investment in technology, enabling them to deliver custody services in an integrated, efficient, and transparent manner,” Bakker said in a statement.
Citigroup is also quite excited about the prospect of joining with Norges. “For Norges to have a partner who is on the ground everywhere was essential, particularly in the new frontier markets,” Okan Pekin, global head of investor services at Citi, told The Financial Times.
This loss of such a deal comes alongside some management changes within JPMorgan and Chase with former co-head of investment banking Mike Cavanagh leaving the firm, who overhauled $19 trillion in company assets, Bloomberg Businessweek said, will leave the firm with John Horner as head of investor relations while Nick Rudenstine remains global head of custody and fund services.