Yahoo Finance JPMorgan (JPM) Plans Hiring in Germany Amid Retail Expansion
Given that JPMorgan JPM is preparing for overseas retail expansion, it plans to hire a team of bankers in Germany. Per a person familiar with the matter who asked not to be identified as the matter is private, the hires could be used across different locations in Germany.
The move comes as the Wall Street giant seeks a steadier revenue stream to offset the volatile returns from its investment banking business. However, a JPMorgan spokesperson declined to comment on the hiring as well as any plans to grow its consumer business.
Notably, JPMorgan entered the British markets last September when it launched the digital-only consumer bank under the Chase brand in the U.K. Initially, a smartphone app was launched, which offered only current accounts. However, it was planned that eventually JPMorgan would provide other banking services and products through Chase.
In December 2021, a Reuters report stated that the digital retail bank planned a hiring spree in order to be able to provide investment, savings, and a wide range of other banking services and loan products. Per the report, Chase planned to add hundreds of staff in 2022, thus taking the total number of staff in the digital-only bank to more than 1,000.
Executives have signaled that they aim to expand the offering to other countries.
Recently, a senior executive at JPMorgan said that the bank is tracking the success of the rollout before it decides as to where and to what extent it will offer the business elsewhere.
JPMorgan’s top executives are aware that the bank will have to struggle to some extent in retail banking outside its home market, as has been seen in the past. However, according to them, because of digitization, there has been a lot of change.
In May, JPMorgan’s chief executive for international consumer growth initiatives, Sanoke Viswanathan, stated, “There's a massive digital disruption happening around the world, and this opens up a window of opportunity for us.”
For JPMorgan, its European Union hub is in Frankfurt. JPM has become one of the largest advisory banks in Germany in recent years.
Our Take
In order to better align with customers’ needs, JPMorgan has continuously been moving toward digitizing operations. These efforts are expected to keep supporting the bank’s profitability and boost market share.
Over the past year, shares of JPMorgan have lost 28.6% compared with a 19.3% decline recorded by the industry.
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Currently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For JPMorgan, there is tough competition in the digital banking space in the U.K. Several local FinTech players like Monzo Bank Ltd. and Starling Bank Ltd., as well as large traditional banks like HSBC Holdings HSBC, have been looking to expand digital offerings.
Last year, HSBC added a function to its mobile app that enables customers to invest in a suite of funds for a minimum of 50 pounds. The move by HSBC was aimed at the younger generation of the U.K.
HSBC, which has an online investment advice service in the U.K., has been shifting into app-based wealth management of late to compete with other firms that offer low-cost trading and an easy-to-use digital app that appeals to younger clients.
Also, Goldman Sachs’ GS online-only bank Marcus — which began operating in the U.K. in 2018 and has more than 500,000 customers — poses a risk to JPMorgan’s expansion efforts.
The key source of Goldman Sachs’ earnings stability is its business diversification. Within traditional banking, a diversified product portfolio has better chances of sustaining growth than many other banks, which have exited some of these areas. Goldman Sachs has continuously been undertaking initiatives to boost its asset management and wealth management businesses, while expanding its digital consumer banking platform. The company remains on track to roll out digital checking facilities.
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