JPMorgan plans to increase its presence in Germany

JPMorgan continues its international expansion aimed at gaining more sustainable revenue. This time the company is planning to increase its presence in Germany. Recently it has become known about an intention of the largest U.S. lender to create its own group of retail bankers on the territory of Germany.

After entering the British market last year with their online retail offering, which became the start of the company’s international expansion, the executives of JPMorgan clearly stated their ambition to enter the markets of other countries as well.

According to the information received by Reuters from one of the top managers at JPMorgan, the company is now observing the process of expansion and is evaluating its success. And after the specialists analyze the results, the company will make a decision on the further direction of business development and its growth rates.

Last Thursday, the information on a new vacancy at JPMorgan in the international consumer banking segment was made available to the public. The company is looking for a specialist to fill the position of people project lead. It offers the potential employee a "start-up atmosphere", a Berlin-based workplace and participance in "this exciting chapter in the continued growth of our business."

According to the statement of Nils Wilm, German recruiter in the sphere of banking, the new positions opened at JPMorgan are clear signals of the company’s upcoming growth in the retail area.

American banks are showing an intent to balance a lucrative but unstable sphere of investment banking with more sustainable gains from other sources. It’s worth noting, though, that local market participants create strong competition within the consumer market, while margin is relatively small.

There is also a risk of challenges associated with retail expansion, especially for those banks which have already experienced a decrease in corporate deals. Such a risk is linked to the rise of inflation and unemployment levels, as well as to general decreasing of consumer spending.

Nevertheless, according to the JPMorgan executives, a digitalization of banking sphere has brought its adjustments to the business, and it might offset the previously existed problems in the area of retail offering in foreign markets. A digital disruption taking place all over the world provides new possibilities, as said by JPMorgan's chief executive Sanoke Viswanathan. Jamie Dimon, a long-standing executive, has directly called the company’s planned actions "a battle."

JPMorgan is currently one of the largest actors in the sphere of advisory banking in Germany, and the company is committed to attracting middle-sized companies, which are the basis of the German economy. JPMorgan’s main residence in the EU is already situated in Frankfurt, which is considered to be the financial center of Germany, and this year the company has hired more than 100 employees in the country to increase its presence in the region.

The company will have to enter a new area of the business, which is already oversaturated with such large and well-known brands as Commerzbank and Deutsche Bank prevailing in the country’s retail banking. According to the information presented by the company, JPMorgan expects to incur a loss of about $500 billion this year, while the reaching the break-even is forecasted to happen in five or six years.