JPMorgan (JPM) Picks Firms for Hong Kong, Taiwan Custody Business
JPMorgan JPM has chosen HSBC Holdings plc HSBC and Standard Chartered PLC SCBFF to run its custody businesses in Hong Kong and Taiwan. The news was reported by Reuters.
A spokesperson for JPM said that the local custodian in Hong Kong would be outsourced to HSBC, while the Taiwan business would be operated by Standard Chartered. The financial details of the deal are not yet known.
Fiona Horsewill, the global head of Securities Services at HSBC, said that the bank looked forward to being appointed by JPMorgan in its home market of Hong Kong and further deepening its relationship in this space.
Margaret Harwood-Jones, the global head of Financing and Securities Services at SCBFF, informed that the bank is elated to extend its relationship with JPM.
According to two separate sources with knowledge of the matter, the Wall Street giant plans to complete the transition to the two banks before the end of 2024.
In December 2023, it came to light through a Reuters report that JPMorgan was planning to exit the local custodian business in Hong Kong and Taiwan. Along with HSBC and Standard Chartered, Citigroup was a probable candidate for the lucrative business back then.
JPM has been providing custodial services, both globally and locally, to clients in Hong Kong and Taiwan. While the company will continue to offer global custody services in the two markets, it decided to stop providing services on the local level as the cost-income ratio went up amid a fall in custodian assets. People familiar with the matter told Reuters in December that as a local custodian in the two North Asian markets, JPMorgan has nearly $520 billion worth of client assets under custody.
In recent years, JPM exited its lower-margin local custodian business from other markets in the Asia Pacific region, including Australia. Although the bank stopped offering local custody services to external clients in Australia, it still maintained itself as one of the largest global custodian operations in the market. Further, in the region, the company offers local custodian services in India.
Over the past six months, JPM shares have rallied 26.7% compared with the industry’s rise of 22.4%.
Image Source: Zacks Investment Research
Currently, JPMorgan carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Standard Chartered PLC (SCBFF) : Free Stock Analysis Report
HSBC Holdings plc (HSBC) : Free Stock Analysis Report
