Reports claim JPMorgan Chase will launch a UK savings bank

Is JP Morgan about to launch a British challenger bank? Chase brand could head here offering savings and current accounts

  • JPMorgan Chase is preparing to launch savings and loan products in the UK
  • This could happen in the next few months, according to reports
  • Sources said it would offer a wider range of products than fellow Wall Street bank Goldman Sachs, which shook up the savings market in September 2018

American banking giant JPMorgan Chase is preparing to pour rocket fuel on the UK savings market as it plans to launch a British challenger bank, according to reports.

The world’s sixth-largest bank will launch a range of savings products and loans under its consumer Chase brand ‘in the next few months’, according to both Sky News and the Financial Times.

The launch could also include a current account, which may present an immediate challenge to the high street giants thanks to JPMorgan Chase’s deep pockets.

Booster rocket: The intervention of Goldman Sachs’ Marcus helped boost rates in September 2018 – JPMorgan Chase could have the same impact

It would mean the bank would be following in the footsteps of fellow Wall Street titan Goldman Sachs, which launched its savings account Marcus in Britain in September 2018.

The introduction of its 1.5 per cent paying easy-access account helped boost previously slumping savings rates, but it too has since made several cuts to its rates in recent times, leading other providers to follow suit.

JPMorgan Chase’s arrival could therefore help inject rocket fuel into a savings market which has seen easy-access and fixed-rate best buy savings deals fall by as much as a quarter over the last year.

Given the bank holds assets of as much as $2.45trillion and is worth £329billion, it could afford to attract money from rate-starved savers if it paid high returns.

Besides Marcus, the banks which have offered the best savings rates, especially on easy-access accounts, have tended to be smaller challenger banks. 

How much have regular savings rates fallen over the last 12 months? 
  Top easy-access rate  Top one-year fixed-rate  Top two-year fixed-rate Top three-year fixed-rate   Top five-year fixed-rate
Rate on
15/02/2019
1.5% 2.15%  2.4%  2.5%  2.7% 
Rate in
14/02/2020 
1.35%  1.65%  1.8%  1.9%  2.1% 
% fall  10%  23%  25%  24%  22.22% 
Source: Savings Champion (All figures correct as of 14/02)

They can afford to pay the best rates but cannot sustain the volumes of cash that that attracts for more than a few days, meaning that when Goldman Sachs-backed Marcus makes cuts they are usually forced to follow.

It could be cause for optimism for savers who have had little to cheer since the start of 2019, despite the Bank of England not making any further cuts to the base rate.

Sources told Sky News that Chase’s British consumer bank, if and when it launches, would offer a wider range of savings products than Marcus. 

Marcus went 15 months before adding to its easy-access account, and even its latest proposition simply allows two people to hold the same account.

Were Chase to offer a range of fixed-rate deals, it would likely help boost that market too, which has not seen the same Marcus bounce.

It is less clear what Chase’s impact on the lending market would be, given that both unsecured and secured borrowing rates for consumers are at historically low levels. 

It is not known whether the bank plans to enter the mortgage market.

JPMorgan Chase did not respond to requests for comment from Sky or the FT.

THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS



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