Global banks curb China travel
published : 22 Oct 2018 at 20:41
HONG KONG: Global banks including Citigroup and Standard Chartered have asked their private banking staff to postpone or reconsider travel to China after authorities there prevented a UBS banker from leaving the country, sources said.
BNP Paribas and JPMorgan have also asked their private banking employees to reconsider their China travel plans after the authorities' action against the UBS banker, two people familiar with the matter said.
Swiss private bank Julius Baer, which manages assets worth $390 billion globally, has asked staff to be cautious about China travel plans, a separate person familiar with the matter told Reuters.
The Singapore-based UBS banker, who is a client relationship manager in the Swiss bank's wealth management unit, still has her passport, but was last week asked to delay her departure from Beijing and remain in China to meet with local authority officials this week. Her identity was not known.
The purpose of the meeting with Chinese authorities is not clear. UBS has declined to comment on the matter. However, the uncertainty has led the Swiss bank, and now several of its rivals, to require their private banking staff carefully consider trips to China, the sources said.
Their caution highlights the risks involved for global private banks in pursuing what is arguably the biggest opportunity worldwide in the wealth management business.
China is the biggest growth driver of the wealth industry in Asia with its large and growing pool of millionaires and billionaires spawned by the country's booming technology sector, making it a key battleground for global private banks.
But its financial sector is under sharp scrutiny as Beijing attempts to lower high debt levels in the economy and curb an outflow of capital from the country to shore up the yuan, meaning there is very little room for error by industry players.
BNP, Citi, JPMorgan, Standard Chartered, and Julius Baer declined to comment. All the sources declined to be named due to the sensitivity of the issue.
UBS is unusual in having an onshore wealth management business in China as well as its offshore operations, but almost all other banks advise wealthy Chinese individuals from offshore locations mainly in Hong Kong and Singapore.
Most offshore wealth managers travel frequently to China for informal meetings with clients, but they are not allowed to either solicit onshore business or market widely offshore investments to onshore clients.
Citi asked staff in its Asia-Pacific private banking team, via a brief email on Sunday, to postpone all China travel, a source with direct knowledge of the matter told Reuters.
JPMorgan has informally advised its private banking managers to review their upcoming China travel plans, three people said.
Bank of Singapore, the private banking arm of Singapore's OCBC Bank, has told staff they can continue with their ongoing China trips but should be cautious in future travel to the mainland, according to people with knowledge of the matter.
A Bank of Singapore spokesman declined to comment.
UBS is the largest wealth manager operating in Asia, with $383 billion of assets under management, according to Asian Private Banker magazine, ahead of Citi, Credit Suisse, HSBC and Julius Baer.
Credit Suisse has not imposed any travel ban on its private bankers on China travel, a spokeswoman said.
The number of high net-worth individuals -- those with at least $1 million to invest -- rose by 12% last year in Asia-Pacific, exceeding growth rates anywhere else in the world, according to consultant CapGemini.