"500 Additional Branches"... US Largest Bank JP Morgan's 'Contrarian Move'

Focusing on Offline Since 2018, Record-Breaking Performance
Proven Effectiveness in Attracting Deposits, SMEs, and Young Customers
Deposit Balance Reaches 2,650 Trillion Won... Doubled in 10 Years

JP Morgan Chase, the largest bank in the United States, plans to expand its branches by 500 locations across the country by 2027. This move goes against the trend of decreasing physical branches as more banking tasks can be easily handled through smartphone applications (apps).

On the 6th (local time), major foreign media including The Wall Street Journal (WSJ) reported that JP Morgan Chase plans to open more than 500 offline branches in the U.S. over the next three years.

[Image source=Reuters Yonhap News]

New branches will be established in Boston, Charlotte, near Washington DC, Minneapolis, Philadelphia, and other locations. Although the exact investment amount was not disclosed, it is estimated to be in the billions of dollars. As of the end of 2023, JP Morgan operates 4,897 branches. Since announcing its offline branch expansion policy in 2018, it has opened 650 new branches over five years. The goal is for 70% of the U.S. population to be able to visit a branch within a 10-minute drive.

This approach runs counter to the overall industry trend. As more financial transactions are conducted through digital media such as smartphone apps, most banks are reducing their offline branches. According to S&P Global Market Intelligence, 123 branches were closed and 80 new branches opened in the U.S. during October last year. According to WSJ, only 17 banks in the U.S. currently have more than 500 offline branches.

JP Morgan is not alone. Its biggest rival in the consumer finance sector, Bank of America (BoA), also uses offline branches as a core strategy for market expansion. BoA plans to enter four more states in the coming years, bringing its total branch presence to 39 states.

Jennifer Roberts, CEO of JP Morgan Consumer Finance, explained that offline branches are effective in attracting customer deposits. Younger customers also consider the ease of visiting branches when choosing a bank. Additionally, offline branches help attract small and medium-sized business clients.

However, this is not an unconditional quantitative expansion. Branches that are not profitable are closed, and the focus is on loans and asset management services that cannot be handled through apps. For example, of the 60 branches acquired from First Republic Bank last year, 30 will be closed and 20 will be reorganized to serve wealthy clients.

JP Morgan’s counter-trend strategy is actually proving effective. When the bank announced its offline branch expansion policy in 2018, analysts were skeptical. However, it has since expanded across all 48 contiguous states and achieved record-breaking performance. The current deposit balance is about $2 trillion (approximately 2,650 trillion KRW), accounting for about 12% of all U.S. bank deposits. This is roughly double the amount from ten years ago. In 2021, JP Morgan surpassed its biggest rival BoA. Last year, its annual net profit reached $49.6 billion (approximately 66 trillion KRW), a 32% increase from $37.7 billion in 2022, marking an all-time high. CEO Roberts said, "These indicators show that our investment was a positive choice. JP Morgan is doubling its growth."

This content was produced with the assistance of AI translation services.