The Strategist

JP Morgan expects $1 billion loss from its digital bank

05/25/2022 - 03:46

U.S. bank JPMorgan Chase forecasts that their all-digital bank, which opened recently, will be unprofitable in the coming years.

Daniel Grass
Daniel Grass
According to Sanoke Viswanathan, JPMorgan's head of worldwide retail growth, stated by the Financial Times, the bank will lose $450 million in 2022 and another $450 million "in the next several years." According to the CEO, the virtual bank would not start making money until 2027-2028 at the earliest.

JPMorgan announced the new project in September as part of its Chase retail development in the United Kingdom. Unlike in the United States, where JPMorgan continues to rely on more traditional methods of reaching retail customers through a vast branch network, consumers in the United Kingdom and other parts of Europe are actively embracing digital banking services.

Over the last few years, this trend has resulted in the closure of tens of thousands of bank branches across the United Kingdom. "Historically, banks have had a difficult time expanding retail business outside of their country," Mr. Viswanathan says. "But we believe it is worthwhile because the market is rapidly shifting to digital transactions."