Jamie Dimon’s European retail-banking experiment is based on a solid theory. Digital lenders, with brand new IT systems and no costly physical branches, should be able to offer superior service at a much lower cost than incumbents. But JPMorgan’s Chase UK venture has so far only really proven that it can suck up deposits. That raises the stakes for a push into Germany – a notoriously overbanked market. The $820 billion U.S. lender said on Thursday that it was planning to launch its Chase consumer business in Europe’s largest economy in the second quarter of 2026. The first German product will be a savings account. It would come almost five years after its UK launch. It’s too soon to tell whether the British leg of the experiment is working. Chase had hoovered up about 23 billion pounds ($31 billion) of deposits by December 2024, partly by offering competitive interest rates. Its 27 million pounds of 2024 earnings equated to a 1% return on average equity, according to Breakingviews estimates. The caveat is that the profit numbers depend on technology expenses charged between Chase and JPMorgan, which are by nature not concrete. What’s clear is that Chase UK hasn’t cracked the lending side of the equation. Customer loans were insignificant as of December 2024, with almost all the deposit money parked in what the group’s filings call “balances held with JPMorganChase undertakings”. According to a person familiar with the matter, that means the funds are managed centrally by the wider group, with a lot of the cash landing at the Bank of England. Over time, Chase UK plans to build out its credit card business and add other products like mortgages. But for now, it seems content to stay below Britain’s regulatory “ringfencing” threshold of 35 billion pounds of deposits, past which lenders must formally separate consumer from riskier divisions. The upshot is that Dimon’s German retail bankers can’t necessarily look to Britain as an example of how to make money. And they’re competing in a fierce local market, where state-backed lenders can often offer low-rate loans. Admittedly, Dutch group ING’s digital-focused Teutonic business offers a handy template. Its German retail division will generate over 1 billion euros of earnings next year, according to analysts’ estimates gathered by Visible Alpha, implying a juicy net margin of more than 30% of revenue. That may explain why JPMorgan recently hired the person who ran it. The good news is that Dimon’s bank can easily stomach the coming losses from its German expansion. Chase UK’s red ink peaked at about 150 million pounds in 2022 – a year in which the parent group’s bottom line was $38 billion. That’s the ultimate luxury for JPMorgan: not many other groups can afford to launch a new experiment before proving the success of the first.