The United States based lending giant JPMorgan Chase is poised to make a large expansion in the retail banking space kin the United Kingdom and the US bank has now purchased the biggest digital wealth manager Nutmeg of Britain as a part of that expansion strategy.
Nutmeg said in a statement that it currently has a total of more than 140,000 clients and has more than 3.5 billion pounds ($4.89 billion) of assets under its active management and added that it would be the bedrock of JPMorgan Chase’s retail digital wealth management products that it would offer throughout the world.
Launched in 2012, Nutmeg offers a range of investment and pensions products to its customers but us yet to reap in an annual profit from its business. A pretax loss of 22 million pounds was posted by the company in its most recent set of full accounts for 2019 which was higher than the loss posted by the online firm in 2018 of about £18.4 million.
While confirming the news of the acquisition, JPMorgan Chase said that Nutmeg will ‘complement’ the lender’s new digital bank, which the company plans to launch in the UK later this year and wil be launched under the brand of its US retail offering JPMorgan Chase.
With the expansion into the UK retail banking space, JP Morgan is seeking to rival established British high street rivals as well as an increasing number of fintechs and it has ambitions to ultimately become a full-service retail bank and will start with offering current accounts.
Sanoke Viswanathan, CEO of international consumer at JPMorgan Chase, said: “We are building Chase in the UK from scratch using the very latest technology and putting the customer’s experience at the heart of our offering, principles that Nutmeg shares with us. We look forward to positioning their award winning products alongside our own, and continuing to support their innovative work in retail wealth management.”
JPMorgan had already launched a product partnership with Nutmeg in November.
“Nutmeg’s customers can expect the same level of transparency, convenience and service that helped make us a leading digital wealth manager in the UK. I am truly impressed with the digital experience that Chase is building for the UK, and this new chapter in our story will see Nutmeg’s customers benefit from a wider range of products and services in the future, and allow us to expand into new markets,” said Neil Alexander, chief executive of Nutmeg.
Nutmeg had said in April this year that it had recorded a 66 per cent revenue growth and said that the firm was moving closer to profitability. But the firm did not provide updated bottom line figures. In the first quarter of this year, a 53 per cent year on year rise in its clients was added by it, to have a total of more than 130,000, the firm said. There was also a 230 per cent increase in net inflows for the first quarter of 2021.
(Adapted from Investing.com & FTAdvisor.com)