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JPMorgan (JPM) Seeks to Expand Commercial Banking in Europe

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JPMorgan Chase & Co. (JPM - Free Report) is planning to expand its presence in Europe by offering commercial banking services to mid-sized firms, per Reuters. However, Doug Petno, the CEO of the company’s commercial banking unit has not yet revealed his plans.

This move comes as JPMorgan shifts dozens of bankers to Paris to adapt to Brexit.

Until now, commercial banking in Europe has been restricted only to European firms. But, now JPMorgan is seeking to offer commercial and corporate lending services to these firms in Europe, some of which are already the bank’s wealth management customers.

Even though interest rates in Europe are low and economic growth is slow, JPMorgan sees commercial lending as a rare bright prospect for growth.

Petno is seeking almost 1500 companies in Europe. He informed Reuters, “This list is heavily curated, handpicked.”

The bank is looking for firms with nearly $500 million to $2 billion in annual revenues in France, Germany, Italy, Netherlands, Spain and Britain.

Some of these firms, which JPMorgan is trying to target, already have businesses in the United States. Others are looking for deals with U.S. companies.

Notably, JPMorgan’s commercial banking unit produced nearly $8.6 billion of revenues in the United States last year. While recruiting staff would be a time-consuming process, Petno is confident that JPMorgan will be able to build a sustainable business in Europe.

JPMorgan’s expansion plan looks impressive. The company has been consolidating its branch network for years to control costs and improve operating efficiency. Moreover, it aims to enter 15-20 new markets by the end of 2023 by opening roughly 400 new branches.

JPMorgan’s shares have gained 2.5% over the past year against the industry’s decline of 8%.

Currently, the stock carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

A few other top-ranked stocks from the finance space are Interactive Brokers Group, Inc. (IBKR - Free Report) , E*TRADE Financial Corporation (ETFC - Free Report) and TD Ameritrade Holding Corporation (AMTD - Free Report) .

Interactive Brokers’ current-year earnings estimates have been revised 1% upward over the past 60 days. Its shares have gained 47.2% in the past two years. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

E*TRADE Financial also flaunts a Zacks Rank of 1. It’s Zacks Consensus Estimate for current-year earnings have moved 6.1% upward over the past 60 days. The company’s shares have surged 37% over the past 24 months.

Over the past 60 days, TD Ameritrade’s earnings estimates for the current fiscal year have been revised 2.1% upward. Over the past 24 months, the company’s shares have rallied 21.2%. It currently carries a Zacks Rank #2.

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