JP Morgan Chase to Outsource its Hong Kong and Taiwan Businesses

JPMorgan Chase plans to outsource its local businesses in Hong Kong and Taiwan, joining Citigroup, HSBC and Standard Chartered in a bidding war, according to two sources familiar with the matter. The people said that the Wall Street Bank, the world's third-largest custodian, is choosing another bank to manage local holdings in Hong Kong and Taiwan. Financial details of the deal were not immediately available.

A local holding company manages the transactions and manages the books that clients enter in specific markets. In contrast, international ownership facilitates cross-border investments and maintains customer relationships through a large network. JPMorgan is the local custodian for these two North Asian markets, managing about $520 billion in client assets, a third source with direct knowledge of the matter said. The bank will continue to offer global custody services in these two markets. 

The bank intends to complete the transition to other banks in Hong Kong and Taiwan by the end of next year, according to the third statement. The first two sources said the move represents a shift away from local storage companies in the Asia-Pacific region.

JPMorgan has exited unprofitable local storage businesses in other markets in the Asia-Pacific region, including Australia and South Korea, in recent years. Two comments suggested the decline in the trustee's assets led to decreased benefits.