JPMorgan Chase to launch digital bank in Germany

JPMorgan Chase is reportedly planning to launch a digital bank in Germany in late 2024 or early 2025. According to sources, the bank has been hiring in Berlin in support of the plan and aims to make the city its base for consumer operations in the European Union. The bank aims to expand its digital retail operations to other EU countries later.

JPMorgan launched its U.K. digital bank, Chase, in September 2021 after a three-year development effort. The bank reported that within a year, Chase had amassed 1 million customers and over £10 billion ($10.8 billion) in deposits. The bank also stated that it aimed to at least double Chase’s 1,000 employees by 2024.

Despite not being a moneymaker yet, Sanoke Viswanathan, the CEO of JPMorgan’s international growth initiatives, stated that the bank expects to lose $450 million in 2022 on its U.K. consumer bank but hopes to break even by 2027 or 2028 and generate significant income thereafter. He also mentioned that banks have historically struggled to perform well in markets outside their home markets in retail banking, but they think this is changing with digital.

JPMorgan’s CEO Jamie Dimon quashed the idea of a brick-and-mortar presence in other countries, stating there is no chance that JPMorgan will put 100 branches anywhere and actually compete. This effort to expand in Europe runs counter to the trend, as Citi is selling or winding down its retail presence in over a dozen foreign markets, including Mexico, Russia, and China.

Despite this, JPMorgan is still planning to expand its digital banking efforts in Europe, with regulations prohibiting the bank from acquiring additional U.S.-based deposit-taking institutions as it already holds more than 10% of U.S. deposits. The bank has made a series of banking-adjacent acquisitions in 2021 and 2022, including British digital wealth-management platform Nutmeg, a 49% stake in the Greek fintech Viva Wallets, and a 40% stake in Brazilian digital bank C6.

However, not all of JPMorgan’s digital banking efforts have found success. The bank shuttered its U.S. digital-only outlet Finn in 2019 after just a year, stating that millennials, the platform’s target demographic, did not necessarily want a digital experience apart from what Chase could provide.