Jamie Dimon's Greek Foray Offers JPMorgan a Gateway to Europe

(Bloomberg) -- JPMorgan Chase & Co. is planning to use its recently acquired stake in Greek payments firm Viva Wallet to support lending to small businesses across Europe, an ambition that would introduce a rare cohesion to the continent's fragmented banking markets.

Viva Wallet's Chief Executive Officer Haris Karonis said in an interview Tuesday that the U.S. lender is backing his firm's plan to expand into business loans, in the form of merchant advance for its clients. Loans made by Viva Wallet will be immediately transferred to a special purpose vehicle owned by JPMorgan effectively making it the first commercial bank to offer financing across Europe, Karonis said.

“There's no one currently offering loans to SMEs everywhere in Europe,” he said, noting Viva Wallet has the necessary licensing to offer banking services in 24 European countries. “The model is that banks offer a broad array of services in a handful of countries. We want to offer a handful of services in all countries.”

The loan transfers to the SPV will help accelerate Viva's lending, Karonis said.

JPMorgan's Viva investment -- which saw it take a 49% stake in the $2 billion-valued company -- was the latest in a streak of acquisitions by the bank. In 2021, the bank had its most prolific year for hunting acquisitions and investments since at least the financial crisis as it fights to fend off fintech startups, augment customer perks and build out businesses.

Read more about JPMorgan's acquisitions

JPMorgan CEO Jamie Dimon, whose paternal grandfather migrated to the U.S. after working as a banker in Athens, traveled himself to Greece for the deal, where he met Prime Minister Kyriakos Mitsotakis. The purchase of the stake is subject to regulatory approvals, which Karonis cautioned could last for months.

“We want to be the first bank without a loan book of our own” he said. “We will be like commissioners, selling the loans to the SPV,” thus minimizing risk and leveraging JPMorgan's vast resources to expand the funds available.

Karonis also said Viva Wallet will offer JPMorgan tech solutions for use in the U.S., including the firm's tap-on application, which can be downloaded on a smartphone and accept card payments, thus rendering legacy point-of-sale terminals redundant.

While Karonis declined to say whether JPMorgan offered to buy the entire firm, he said the founders were never interested or willing to sell their own stake.

“There's nothing, which you really need, that you can buy with $100 million, but not with $10 million,” he said, adding that he has no intention of listing Viva Wallet at the Athens Stock Exchange or any other exchange.