J.P. Morgan SE (Societas Europaea or a European public company) serves as J.P. Morgan’s primary EU legal entity, a structure formed around the time of Brexit by consolidating the existing legal entities in Germany, Luxembourg and Ireland. It encompasses 15 locations, including the Frankfurt headquarters and 14 branches, including Luxembourg.
In an interview with Paperjam on 18 March 2025, Stefan Behr, CEO of J.P. Morgan SE, said that he considers the reorganisation to be “completed” but also remarked that will still require the bank to make “changes on the fringe, not in substance.”
Behr explained that the reorganisation was not only a necessity due to Brexit but also an opportunity to streamline a setup that had evolved organically over many years. He commented that the aim of the bank was to create a more “fit-for-purpose” structure for the post-Brexit environment.
Diversified business across Europe
Behr explained that the business scope of J.P. Morgan SE covers a wide range of banking activities, including market activities (trading), which is the largest revenue generator (35%) and its “main source of profitability,” with Paris being the primary hub.
Investment banking and payments are reported together and constitute about 30% of the bank revenues. Client coverage and product specialists for investment banking exist at a local level via branches in individual countries.
Securities services contribute approximately 20% to the revenues, and Luxembourg plays a crucial role as a hub for this activity. Behr argued that the country’s proximity to the client base made it a natural location for this function.
Private banking accounts for 16%-17% of the revenue. Behr commented that J.P. Morgan centralised all its private bank activities in EMEA in Luxembourg and merged them with its securities service hub in 2019 to form one bank that has now, since 2022, become a branch of J.P. Morgan SE.
Growth areas and market dynamics
Despite the high level of contribution from markets and investment banking, Behr admitted that “they tend to be volatile,” yet he argued that they also tend to be countercyclical, as M&A does well in times of certainty while its market division performs better during uncertainty on the back of hedging operations. “[They’re] somewhat balancing each other out.”
Securities services and payments are seen as offering more stable growth, typically seeing steady single-digit percentage increases, and are somewhat linked to interest rate developments because of their deposit bases. Behr claimed that the bank has grown its market share in both of these stable businesses.
Despite margin pressures and market consolidation, Behr sees private banking as a significant growth area and has invested in it by increasing headcount and technology expenses. Supported by a growing number of wealthy individuals, he thinks that the scale and the brand of J.P. Morgan are seen as competitive advantages, allowing, for instance, for the absorption of compliance costs across a larger client base.
J.P. Morgan SE has also invested in building a team in commercial banking (mid-market clients) across Europe to cater to mid-market clients, focusing on their international growth plans and offering a range of corporate banking products.
Behr stated that J.P. Morgan SE has not observed a decline in “any of its businesses” and noted that the securities service and payment businesses, for instance, have been displaying a “steady growth” of 3% to 5% over the year.
State of the European economy
On M&A, a division giving the economy’s pulse, Behr said that “2021 has been the peak of the cycle; then we’ve seen signs of recovery for quite a while, but it has not been an easy environment.” He did note that 2024 has been a better year than the previous two years. Despite a “wealthy pipeline,” he noted that the current period of uncertainty makes it difficult “to get deals across the finish line.”
Who are J.P. Morgan SE’s competitors?
“We’re sort of a universal bank in Europe… I think that, given the business mix, in terms of the bias towards banking and markets, [we are] closer to our US peers.” Yet he thinks that given their scale in corporate banking and payments business make J.P. Morgan SE closer to a European bank. “There are not that many competitors that have that, making us somewhat unique.”
Impact of Ukraine
Behr claimed the war in Ukraine has had a limited direct impact on J.P. Morgan SE due to its primary focus on the EU and minimal exposure east of the bloc. However, he stressed that the war influences market sentiment and contributes to overall volatility and uncertainty.
Cautious return to defence financing
Regarding financing the defence business in Europe, Behr considers it to be “early days” for the market adjustment for European banks. He recognises that existing local banks will support domestic defence business.
It is somewhat surprising to observe the cautiousness of a US bank such as J.P. Morgan: it hasn’t been very proactive, considering the propensity of US banks to go in sectors where European banks typically show faint-hearted feelings, such as financing the oil sand industry in Canada. “As an SE, we are a European entity,” said Behr. “We sort of deal with European market reality in our business.”
Behr noted that banks appear to be taking a measured approach to this sector, observing market developments and EU-level initiatives.