©Reuters. FILE PHOTO: The logo of HSBC is seen on its headquarters in the central financial district in Hong Kong, China, August 4, 2020. REUTERS/Tyrone Siu/File Photo
By Selena Li
HONG KONG (Reuters) – JPMorgan Chase (NYSE:) has selected HSBC and Standard Chartered (OTC:) to run its custody businesses in Hong Kong and Taiwan, with assets worth more than $500 billion, a company said. US Bank spokesperson.
Reuters reported that in December JPMorgan, the world’s third-largest global custodian, would outsource the operations of its local custodian businesses to Hong Kong and Taiwan with Citigroup, HSBC and StanChart vying for the mandate.
The Wall Street bank has decided to entrust its local custodian bank in Hong Kong to HSBC and Taiwan to StanChart, the spokesperson said. Financial details of the deal were not immediately known.
Total assets under custody in the two North Asian markets stood at around $520 billion as of December, Reuters reported at the time, citing a person familiar with the matter.
JPMorgan aims to complete the transition to the two banks by the end of this year, according to two separate sources familiar with the matter, who declined to be named because they were not authorized to speak to the media.
Fiona Horsewill, global head of security services at HSBC, said the bank was looking forward to being appointed by JPMorgan in its home market of Hong Kong and further deepening its relationships there.
Margaret Harwood-Jones, global head of securities and financial services at StanChart, said the bank is excited to extend its relationship with JPMorgan through this appointment into an important Asian market.
JPMorgan’s appointment was first reported Wednesday by Global Custodian.
Asset custodians guard investors’ securities to prevent them from being lost. They also manage transactions and settlements to ensure client accounts comply with tax and other regulations.
JPMorgan provides both global and local custody services for clients in Hong Kong and Taiwan, but has decided to withdraw from the local level as its cost-to-income ratio has risen due to declining assets, two sources said in December.
In 2020 the bank ceased offering local custody services for external clients in Australia, while maintaining one of the largest global custody operations in the market.