JPMorgan Chase (JPM.N), the world’s third-largest global custodian, is poised to outsource its local custody operations in Hong Kong and Taiwan, with Citigroup (C.N), HSBC (HSBA.L), and Standard Chartered (STAN.L) competing for the mandate, according to insider sources. The move involves selecting another bank to take over local custodian responsibilities, handling transactions and client bookkeeping in these North Asian markets, where JPMorgan manages around $520 billion in client assets under custody (AUC). This strategic shift signifies JPMorgan’s exit from the local custodian business in the Asia Pacific region, following similar moves in Australia and South Korea due to declining custodian assets, making the business less lucrative.
The transition, slated for completion by the end of next year, allows JPMorgan to focus on its core global custody services in Hong Kong and Taiwan, emphasizing cross-border investments and client relationships. The outsourcing decision aligns with the bank’s efforts to streamline operations and maintain competitiveness in the evolving financial landscape.