- JPMorgan Chase agreed Thursday to buy British digital wealth management platform Nutmeg for an undisclosed sum, which The Times of London and Reuters are pinpointing at close to £700 million ($972.8 million).
- The move, pending regulatory approval, comes months after the U.S.’s biggest bank acknowledged it would launch a digital banking platform in the U.K. this year.
- The acquisition lays out a path to expansion for a bank that is limited in that regard domestically. Regulations prohibit JPMorgan from acquiring U.S. retail banks because it already holds more than 10% of the country's deposits.
JPMorgan Chase CEO Jamie Dimon said at the bank’s 2020 annual investor meeting that it would be "much more aggressive with acquisitions across the board." The comment, incidentally, came days after rival Morgan Stanley announced it would buy brokerage firm E*Trade in what was, at $13 billion, the largest bank takeover since the 2007-08 financial crisis.
In Nutmeg, a robo-adviser with $4.9 billion in assets under management, JPMorgan is buying a company with which it first forged a partnership in November. That initial deal allowed Nutmeg to offer exchange-traded funds created with the bank’s help.
JPMorgan has employed a similar strategy before. The bank announced in December it was acquiring 55ip, a startup that helps financial advisers automatically create tax-efficient portfolios. But the bank has also spun off platforms it has developed, such as Quorum, then continued to work with them.
The Nutmeg deal is meant to complement JPMorgan’s digital bank rollout as part of an expanded U.K. footprint.
"We are building Chase in the U.K. 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," Sanoke Viswanathan, JPMorgan Chase's CEO of international consumer growth initiatives, said Thursday in a statement, according to CNBC. "We look forward to positioning their award-winning products alongside our own, and continuing to support their innovative work in retail wealth management."
Because the U.K. and Europe have different regulatory requirements, the companies said, the bank opted to buy Nutmeg rather than use investment technology developed in the U.S.
"I don’t think this is a major spend and it gives them a quick leg up in the marketplace in the U.K.," Chris Skinner, CEO of financial technology research firm The Finanser, told Reuters on Thursday.