||Ms. Kalpana Morparia is the Chief Executive Officer of J.P. Morgan, India. She shares her insights on the current M&A environment and discusses the skills required to become a successful investment banker.|
Ms. Kalpana Morparia is the Chief Executive Officer of J.P. Morgan, India. Ms. Kalpana leads each of the firm's lines of business -Investment Banking, Asset Management, Treasury Services and Principal Investment Management. She also has responsibility for Service Groups operating in India, including Global Research, Finance, Technology and Operations. Internationally, Ms. Kalpana is a member of J.P. Morgan Asia Pacific Executive Committee.
What do you think will be the pace of mergers and acquisitions in the near future given the uncertainties in the global economy?
While overall activity could be expected to slow down in an uncertain environment, there will be pockets of action, as relatively well-placed, and cash rich corporates use a downturn to expand inorganically at a reasonable cost. These corporates could use the downturn to fill gaps in their own capabilities/product portfolios by buying inherently good assets, instead of expanding organically. We could also see a round of M&A activity as corporate from better performing economies (Emerging Markets) look to acquire selective assets in the Developed Markets.
Why did you to shift to JP Morgan from ICICI after 33 years and was it difficult for you to shift?
ICICI Bank had a mandatory retirement age and as such I retired from ICICI Bank after a long and fulfilling career. JPMorgan was really a second career for me and I am enjoying my job immensely as it combines the best of two worlds â€“ being in India (the second fastest growing economy in the world) and JPMorgan â€“ one of the strongest global banks.
What lessons should we learn from the financial crisis of 2008 so that similar events donâ€™t occur in India?
What we saw in the Global Financial Crises shows that innovation in financial products should be calibrated â€“ not all new products are useful. The aim must be to provide benefits to clients/businesses beyond just traders and other financial intermediaries. Another key aspect is the role of risk management â€“ regulators and financial institutions must work together better, and evolve mechanisms to identify and deal with asset bubbles. Compensation packages could also be more scientific â€“ greed is not necessarily good!
Has the new regulatory tsunami tied up the hands of investment banking as a profession leaving less scope for creativity? How do you cope up with the rapidly changing regulatory frameworks?
Regulations should not always remain static â€“ they do need to evolve along with the financial system. What is more important is a regulatory environment that is proactive, and identifies the path of change in the financial system, rather than a purely reactive environment. While regulations today are evolving, there is enough scope in India for new financial products and innovations.
What are some of the key challenges in the investment banking business in India? Are there any regulations that need to be changed to boost investment banking in India?
The Indian investment banking industry is relatively well regulated â€“ but we should not be complacent about this. There is a lot of scope for growth in the industry, in areas such as FX/Commodities, ETFs etc.
What skills do you look for when hiring an entry-level investment banking professional?
It's all about teamwork coupled with individual flair. We seek highly motivated, results-driven, creative individuals who can generate ideas and execute them successfully. Our hires have strong entrepreneurial, analytical, quantitative, communication and client relations skills.
How important is sales/communication skill compared to technical/financial modeling skill for a successful investment banker?
An idea that cannot be marketed effectively is no good. A complete Investment Banker is one who can mobilize his ideas as effectively as he conceives them.
For many finance students (MBAs, CFA candidates etc.), it is difficult to decide which field to pursue within finance (like investment banking, private equity, asset management etc.). How do you think the students should choose the best path for their long-term career?
It is critical to acknowledge that these fields differ significantly from one another, and an individual who is excellent at one may well be unsuitable for another. A good investment banker need not always make a good Sales Trader, and vice versa. As such, it is imperative that students research intensively on these fields to understand them fully, before making a choice. Speaking to alumni in these fields, and reaching out to industry experts is a must do. Needless to say, summer internships are possibly the best platform to assess a particular field and observe other fields.