JPMorgan Chase is expected to give European back-office staff at Bear Stearns a reprieve of up to 12 months as the American investment bank decides which of its rival businesses it will retain once its $1.4 billion (£699 million) takeover is complete.

Sources said that about one third of Bear's 1,400 European staff were in support and operations roles and would be kept on for several months after the completion of the deal.

JPMorgan also believes that it can win back clients that deserted Bear's prime brokerage in recent weeks. It hopes to develop the bank's European prime broking business. Bear is the third-largest prime broker in America, but has only a small presence outside the United States.

A source said that JPMorgan had received assurances from hedge fund managers that they would come back to Bear once uncertainty surrounding the bank eased. Paul Brannan is Bear's head of European prime broking — a division that last year is thought to have taken $100 million in revenues.

Bankers at rival prime broking businesses said that the influx of customers from Bear had slowed. A source said: “In Europe, they're very small and a lot of what business they did have was the international business of their US clients. Business definitely moved from Bear in recent weeks, but it's fair to say that that flow died down when the announcement came out from JPMorgan.”

JPMorgan is also thought to be keen to retain Bear's European equities business, which concentrated on sales and trading. Other areas, such as foreign exchange, are likely to overlap with JPMorgan's existing business and are too small to add significant value to the bank. In these cases, only selected individuals are expected to be kept on.

JPMorgan has not yet made a decision about whether to keep Bear Stearns's place at 5 Churchill Place in Canary Wharf, London. Bear has agreed a lease on ten of the building's twelve floors with its owner the Canary Wharf Group.

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