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May 25, 2022

JP Morgan stares at $1bn loss from overseas retail arm

American banking giant JP Morgan Chase is staring at losses of more than $1bn from its international retail bank in the next few years, Financial Times has reported.

During the investor day presentation earlier this week, JPMorgan international consumer business head Sanoke Viswanathan said that Chase is expected to break even by 2027 or 2028. 

The banking group estimates that losses on the digital bank in 2022 and “for the next few years” would be around $450m.

Subject to Chase’s ability to execute its strategy, the digital bank is expected to generate “significant income thereafter”, Viswanathan noted.

Digital-only Chase was launched in the UK in September 2021 marking the American banking group’s first step into the international retail banking market.

“Historically, banks have struggled to do well in markets outside their home markets in retail banking. We think this is changing with digital.” Viswanathan said, adding that, “there is massive digital disruption happening around the world. And this opens up a window of opportunity for us.”

JP Morgan plans to expand the digital bank to new markets over time.

In December 2021, Viswanathan told Reuters about the bank’s plans to hire hundreds of employees in 2022 to expand its product portfolio. 

Notably, JP Morgan’s digital-only approach in the international market is opposite to its strategy in the US, where it operates nearly 5,000 retail branches. 

During the investor day, JP Morgan CEO Jamie Dimon said: “There is no chance that JPMorgan will put 100 branches in Mumbai or Hong Kong or London or anywhere and actually compete.”

Since the launch in the UK, Chase is said to have amassed over $10bn in deposits with a customer base of more than 500,000.

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