JPMorgan chases retail banking’s golden fleece

{"text":[[{"start":3.4,"text":"What’s Europe’s biggest investment bank? It’s a trick question: the answer is JPMorgan Chase. The US lender tends to dominate the region when it comes to M&A and capital raising, much to the chagrin of local lenders. Its new online-only German bank, opened last week, will test whether it can make a similar mark in the consumer world."}],[{"start":24.2,"text":"Targeting the European consumer is a swerve for JPMorgan chief Jamie Dimon, who used to dismiss international retail banking as a fool’s game. Between local regulations, cultural differences and the need for expensive branch networks, there were few economies of scale from operating the same brand in Berlin, Germany and Berlin, New Hampshire."}],[{"start":45.45,"text":"Now, he thinks technology has changed the equation. Chase’s first foreign retail venture, which opened in the UK in 2021, has gone fairly well. The bank’s challenge is to show that the model can be efficiently transplanted between markets."}],[{"start":59.900000000000006,"text":"Is Dimon’s logic sound? On the appeal of Germany, it is. The market is huge and, while the country’s banking sector overall is not very profitable, that is down to its many inefficient regional institutions. ING’s German retail business reported a 2025 return on equity of 27 per cent, not far off the 32 per cent JPMorgan makes serving US consumers and small businesses. "}],[{"start":null,"text":"

"}],[{"start":86.65,"text":"On his other contention — that tech can conquer linguistic and regulatory borders — the evidence is less clear-cut. But he’s not the only one who thinks so. Spanish lender BBVA opened a digital bank in Germany last year; rival Santander wants to expand its digital Openbank business, currently in six countries. Smaller companies are also trying, with Georgia’s Lion Finance hoping to build a similar network along Europe’s fringes. "}],[{"start":116.60000000000001,"text":"Fintechs such as Revolut and Latin American digital financier Nubank have shown it is possible to rapidly expand in multiple countries using a common tech platform, but neither is a perfect role model: Revolut doesn’t yet lend in large amounts, while Nubank mainly serves customers who previously had little access to credit, not the sort Chase would be targeting."}],[{"start":139.70000000000002,"text":"Culture and local rules still matter: supermarkets such as Tesco have learnt in the past that a business model that works in one place can flop in another. Moving Chase to Germany meant integrating with European payment systems and quirks such as German church taxes. It will also offer different financial products than it does in the UK. Still, it will be spared the challenge of trying to open thousands of physical branches. "}],[{"start":166.10000000000002,"text":"Filings for the subsidiary that houses the bulk of Chase’s UK business show a net profit of £114mn last year. That’s not a full financial picture but suggests the international expansion is gaining some traction — and has a better chance of success than Finn, the lender’s ill-fated first attempt to build a US digital bank aimed at millennials and younger consumers. "}],[{"start":189.75000000000003,"text":"It might seem strange that Dimon, who has run JPMorgan for more than two decades, is only now extending the bank’s tentacles into overseas retail markets. With nearly $5tn of assets and a relatively calm US economy, he can afford to take the risk. Besides which, branching out may give him an extra excuse to stick around a while longer."}],[{"start":218.75000000000003,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1780124365_1531.mp3"}