JP Morgan, the largest American money bank, benefits from the increasing number of German companies investing in the USA. However, it is not alone - other foreign banks are also gaining market share in German corporate banking. According to an analysis by Barkow Consulting, based on Bundesbank data, the market share of foreign banks in the lending business with German companies has increased from 8.8 percent to 12.6 percent over the last ten years. While this may sound moderate, it underscores the ambitions of these banks in the German market.
"One example is the large US bank JP Morgan, which has significantly expanded its position in the German middle market since mid-2022. With the number of customers already doubled, the bank is aiming to double once again in the next five to ten years, as Bernhard Brinker, the manager responsible for the bank, told Handelsblatt. With this move, the bank is competing with domestic institutions such as the Landesbanks, Commerzbank, and Deutsche Bank."
"JP Morgan's Ambitions Outlined by CEO Jamie Dimon in a July 2023 Interview with Handelsblatt"
In an interview with Handelsblatt in July 2023, JP Morgan’s Chairman and CEO Jamie Dimon made clear the company’s ambitions. He stated that the company's European subsidiary, based in Frankfurt, aims to ascend into the top 3 banks in Germany. By the end of 2022, JP Morgan had already achieved the fifth position with a balance sheet total of 436 billion euros. Part of this strategy includes the launch of the digital bank Chase in the German market, expected to commence in 2025. Dimon also emphasized the desire to continue expanding in all business areas within Germany and the EU.
Since 2019, JP Morgan has been courting not only large but also mid-sized companies. Manager Brinker defines the target group as companies with an annual revenue of approximately 300 million euros up to two to five billion euros or with an operating profit (Ebitda) starting at 40 to 50 million euros. This also includes customers like Birkenstock, Renk, or Schön-Klinik-Gruppe, which have recently gone public, as well as Profine, a plastic manufacturer. Manager Brinker, who moved from Hypovereinsbank to JP Morgan at the beginning of 2019, has established this new mid-market segment. The bank has particularly set its sights on customers who are either already operating internationally or are aspiring to take this step.
Current Team at JP Morgan in Frankfurt and Zurich Comprises Approximately 25 Employees. Brinker Indicates That the Number of Employees is Expected to Increase by a Further Ten to 15 Percent in the Coming Years as the Bank Continues on its Growth Trajectory. JP Morgan Sets Itself Apart from Other Banks with Its Strong Balance Sheet, Global Network, and Extensive Product Range. In Addition to Advising on Acquisitions and Financing, the Bank Also Offers Complete Payment Transactions for Corporate Clients Worldwide.
A large part of the current success of JP Morgan in customer acquisition is due to the increasing number of German SMEs (small and medium-sized enterprises) who want to expand their business in the USA. These companies are happy to make use of the network of the largest American bank. Brinker explains, "Many German companies are increasingly investing abroad, with a significant portion of this going to the USA." Particularly interesting for these companies are the numerous incentive programs and tax benefits offered by several US states. Additionally, the American market is an important sales market for many companies.
"Moreover, Commerzbank Vice-Chairwoman Bettina Orlopp notes a growing investment willingness among German corporate clients, but unfortunately more so abroad and not enough within Germany. This is not a positive development for the German location. At JP Morgan as well, there is an increasing number of medium-sized businesses engaging with mergers, acquisitions, and the involvement of investors. An example of this is the sale of the heat pump division of Viessmann to the US competitor Carrier Global. Manager Brinker reports that many medium-sized companies are now discussing whether their businesses are well prepared for the future or if they need a transformative business deal."
Brinker's Observations Confirmed by Other Banks. According to Wolfgang Fritsch, the head of Central European corporate banking at Swiss UBS, there is an increasing willingness to invest among German corporate clients, especially in areas such as digitalization and sustainability. Currently, JP Morgan is also engaging with smaller companies in selected industries, such as technology and sustainability. JP Morgan strives to meet the needs and ambitions of their clients and leverages the strong foundation of the bank's global network. Presently, JP Morgan is expanding its market position in Germany and is in the process of establishing itself as one of the leading players in the German corporate banking sector.
