JPMorgan Chase & Co. (JPM) is in the process of launching its first-ever retail bank overseas. The Financial Times reports that the financial institution is poised to set up in the U.K. with the launch of a digital bank under the Chase brand.
JPM shares fell 0.24% to close at $157.68 on September 17. JPM is a financial services company that offers deposit and investment products and services to consumers.
Expansion into the U.K. has been in the works as part of a secret project codenamed Project Dynamo. The move is poised to strengthen competition in the U.K.’s digital banking landscape, currently dominated by digital-only startups such as Monzo, Starling, and Revolut. The startups are increasingly poaching customers from traditional banks. (See JPMorgan stock charts on TipRanks)
Head of JPMorgan’s international consumer division, Sanoke Viswanathan, has confirmed plans to transform Chase into a force to be reckoned with in the U.K. The U.K. expansion should pave the way for further expansion into other European and Latin American markets, Viswanathan said.
“We will spend hundreds of millions before we get to break-even and get to a place where this is a sustainable business, and we’re not in a rush,” he added.
In the U.K., JPMorgan will initially offer current accounts together with a rewards program. It also plans to expand its offerings into personal lending, investments, and mortgages. While the company has not set a target for the number of customers it plans to attract in the U.K., it intends to meet all their banking needs.
Expansion into the U.K. comes on the heels of JPMorgan reaching an agreement to acquire British digital wealth manager Nutmeg. It has also confirmed its plans to pursue other acquisitions.
Recently, Jefferies analyst Ken Usdin reiterated a Buy rating on JPMorgan with a $177 price target, implying 12.25% upside potential to current levels. After a meeting with the bank’s Co-President Daniel Pinto, the analyst believes the company is well-positioned to benefit from a recovering global economy.
Usdin stated, “Trading has started to normalize, but has held up better-than-expected. JPM believes it can at least maintain its market share positions in IB/trading and add in Wholesale Payments and Securities Services.”
Consensus among analysts is a Moderate Buy based on 7 Buys, 4 Holds, and 1 Sell. The average JPMorgan price target of $170.27 implies 7.98% upside potential to current levels.