One of the World’s largest multinational financial services firms, JP Morgan, is looking for another bank to take over its local custody business in Hong Kong and Taiwan, according to a report by Reuters. The total value of clients’ assets under custody in these 2 markets is around $520 billion. However, the exact financial details of the deal are not made public yet.
A local custody business is when a custodian takes care of transactions and bookkeeping of investments and business done in a particular market. On the other hand, a global custodian is someone who takes care of relationships with clients and manages cross-border investments and transactions.
The firm is looking to complete the transaction and take over by the end of the next year. However, JP Morgan Chase will keep providing global custodian services to both markets. This step will mark the exit of JP Morgan’s custody business from the Asia-Pacific except for India. The bank still holds a custody business in India.
The reason for this move is believed to be the deteriorating relations between China and the United States of America and the fact that the USA became India’s biggest trading partner and not China’s. On top of that, the tough economic conditions of the Chinese economy also inspired this decision. So far, the spokesperson of the bank has hesitated to comment on the situation.
