JPMorgan doubles down on UK retail bank Chase


LONDON, Sept 28 (Reuters) – Wall Street giant JPMorgan plans to double the workforce of fledgling British retail bank Chase to at least 2,000 within two years, the firm’s CEO has told Reuters. , despite losses and investor skepticism.

JPMorgan said it has attracted one million customers and more than £10 billion ($10.8 billion) in deposits to its UK mobile app bank since its launch last September.

It’s a model the bank is keen to replicate in other international markets, despite the deepening cost of living crisis that has clouded the outlook for retail banks globally.

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Britain in particular has been plagued by a crisis of investor confidence after Finance Minister Kwasi Kwarteng sent the pound and government bonds into a tailspin on Friday with a budget plan that confounded markets. . Read more

“We want to be international, starting with the UK,” Sanjiv Somani, Chase’s UK chief executive, said in an interview at the bank’s UK headquarters in London’s Canary Wharf on Friday.

“You have to look at a ten-year view. If you look at anything shorter, it won’t lead to the right conclusion… The retail banking revenue pool is in the trillions, even outside of the United States”

He declined to say where Chase might pitch next. Reuters reported this month that JPMorgan was hiring retail bankers in Germany ahead of a potential launch there. Read more

Chase already has 1,000 employees in Britain – out of a total of 19,000 JPMorgan employees in the country – and Somani says that number will “at least double” by the end of 2024.

The business will expand from checking accounts and savings accounts by rolling out loan products — likely starting with a credit card — by the end of 2023, Somani said.

JPMorgan will also seek to integrate its Nutmeg investment business – which it bought for around £700 million last year – from Chase during this period, it added.

Somani began his retail banking career in India by helping Citi launch a much simpler version of a “digital bank” – one that would text your bank balance to you.

“The idea is that in the medium term we want to be a full-service bank,” he said of Chase, adding that it had no immediate plans to roll out branches.


The company’s rapid growth has come with a hefty price tag – although one of the biggest banks in the world could easily absorb it.

JPMorgan revealed at its Investor Day in May that it expected to lose $450 million on the business in 2022 and described cumulative losses north of $1 billion over several years, before projecting that would break even in 2027-28.

Somani said May’s Investor Day projections still held, but revenue generated from lending and Nutmeg’s fee-based service expansion would ultimately put him in the dark.

Investors have expressed concern about the lack of details about JPMorgan’s digital investments and their uncertain outlook, adding to pressure on the international consumer arm to succeed.

“The story is against JPMorgan’s attempt to create an online digital bank in the UK and elsewhere,” said Wells Fargo banking analyst Mike Mayo, although he added that JPMorgan’s U.S. digital expertise and its deep pockets could make the difference.

The UK market has seen many failed attempts to challenge the dominance of its main high street banks – which include Barclays, Lloyds and NatWest. Germany’s N26 left the country after just two years, while Citi cut its UK retail bank last week. Read more

Chase also faces fierce competition from local digital brands like Monzo and those offered by big institutions like Goldman Sachs’ Marcus Savings Bank. Marcus grew at a similar pace to Chase in the early days, amassing £13billion in deposits in Britain in its first 17 months.

Somani said JPMorgan’s backing still gave Chase an edge.

“We are the best-funded fintech in the world,” he said.

($1 = 0.9235 pounds)

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Reporting by Iain Withers Editing by Mark Potter

Our standards: The Thomson Reuters Trust Principles.


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