JPMorgan Chase, the world’s biggest lender by market capitalisation, is close to making a stunning entry into Britain’s personal banking market.Sky News has learnt that the New York-listed behemoth will launch a range of savings and loan products using the Chase brand in the UK in the next few months. The move will represent one…
JPMorgan Chase, the world’s biggest lender by market capitalisation, is close to making a stunning entry into Britain’s personal banking market.
Sky News has learnt that the New York-listed behemoth will launch a range of savings and loan products using the Chase brand in the UK in the next few months.
The move will represent one of the most significant new entries into the consumer banking sector since the 2008 financial crisis, and could spark a new price war among lenders already struggling to deal with a protracted period of ultra-low interest rates.
JPMorgan is due to hold an investor day next week at which it will set out details of its growth strategy, although it was unclear this weekend whether the consumer banking launch in Britain would be mentioned.
Sources said that JPMorgan Chase has been in discussions with City and banking regulators about securing the necessary approvals to pave the way for the launch.
They added that the new service was likely to launch later this year.
The US-based bank reported in its fourth-quarter earnings last month that Chase had an average deposit base of $708bn (£540bn).
Its consumer banking business operates predominantly in the US, and sources suggested that its expansion to the UK represented a potentially valuable opportunity for one of the world’s flagship banking brands.
One insider said that Chase was likely to offer savings and current accounts, as well as a range of open banking services and loan products.
It was unclear whether the bank planned to enter the fiercely competitive UK mortgage market.
Further details of JPMorgan’s plans could not be determined this weekend.
In the US, JPMorgan boasts that consumers can open an account online within five minutes, and now has well over 50 million digital banking customers.
It has, however, faced setbacks in its digital expansion strategy, announcing last year that it was closing Finn, its online-only brand, after poor take-up from consumers.
Elements of the technology platform for JPMorgan’s UK digital bank are understood to have been developed by 10x Future Technologies, the company set up by Antony Jenkins, the former Barclays chief executive.
Sky News revealed last June that JPMorgan was buying a stake in 10x.
TechCrunch, the technology news website, reported last summer that JPMorgan was also working on a secret digital banking project in London.
In recent weeks, the bank has been actively recruiting staff to work on the project.
An unnamed existing JPMorgan executive is understood to be spearheading the plans.
When the new bank is launched, it would mean the two biggest names on Wall Street now operate consumer banks in the UK, following Goldman Sachs’ launch of Marcus in 2018.
Rival Citi previously owned Egg, the consumer lender, but sold it in separate transactions in 2011 to Barclays and the Yorkshire Building Society.
This week, Morgan Stanley announced the biggest takeover by a Wall Street player since the banking crisis when it bought E-Trade, the online brokerage, for $13bn (£9.9bn).
A City source played down suggestions that the new Chase-branded service would be directly comparable to Marcus, saying it would offer a wider range of products.
News of the Chase brand’s entry to the UK market comes amid a bank reporting season that has reflected a more upbeat outlook for Britain’s economy, while underlining the continued legacy of mis-selling scandals such as payment protection insurance.
Antonio Horta-Osorio, chief executive of Lloyds Banking Group, pointed this week to “a clearer sense of direction [for the UK] and some signs of gradually improving economic indicators”.
Next week, Metro Bank, which became the first new high street lender for a century when it launched a decade ago, will outline a revised strategy under Daniel Frumkin, its newly appointed chief executive.
Chase’s launch in the UK will also throw down a challenge to the ‘neo-banks’ which have promised to steal market share from the big five high street lenders.
Revolut is about to announce a $500m (£381m) equity-raise, revealed by Sky News, that is being led by Technology Crossover Ventures, an early backer of Netflix and Spotify.
The funding round, which is being accompanied by a $1bn (£760m) convertible loan, will give Revolut a pre-money valuation of $5.5bn (£4.2bn).
Coincidentally, JPMorgan’s investment bank is working with Revolut on the capital-raising.
Monzo, another digital player, is finalising a further fundraising that will value the company at well over £2bn, while Starling Bank has just received a £60m equity injection from shareholders.
For JPMorgan, which has a market value of $431bn (£329bn), its plans contrast with warnings fired by Jamie Dimon, its chairman and chief executive, about its presence in the UK if Britain left the European Union.
Speaking alongside the then chancellor, George Osborne, in 2016, Mr Dimon said that as many as 4,000 jobs could disappear from the group’s British workforce.
A JPMorgan spokesman declined to comment on Saturday.