HSBC is "retreating" with a turnover of over HK$111 billion

Recently, JPMorgan has carried out a large-scale stock transfer in the Hong Kong stock market. According to the data from FUTU, from August 5 to August 20, the market value of JPMorgan's stock holdings in Hong Kong fell from the 4th place to the 16th place, and the market value dropped from HK$131 billion to HK$18.7 billion, involving more than HK$110 billion. It is worth mentioning that JPMorgan also carried out a similar large-scale stock transfer in July, involving more than HK$60 billion.

Source: FUTU

JPMorgan carried out a stock transfer involving about 1400 shares, involving HK$68 billion, accounting for more than 33% of the Central Clearing System (CCASS) in the July operation. In this stock transfer, the shares of Tencent Holdings, Alibaba and Youpon Insurance were transferred in large quantities.

JPMorgan previously stated that it would outsource its domestic custody business in Hong Kong and Taiwan. The Hong Kong market will be taken over by HSBC, and the Taiwan market will be managed by Standard Chartered. The goal is to complete it before the end of this year.

It is understood that domestic custody business mainly involves transaction handling and accounting services when customer funds enter the market. Global custody business is managed through its vast network to manage cross-border investment and maintain relationships with customers. Compared with global custody business, domestic custody business is usually considered to have a lower margin.

JPMorgan manages client assets under local custody (AUC) worth about US$52 billion in Hong Kong and Taiwan, which reflects its importance in the region's market.

However, due to the decline of custody assets in recent years, JPMorgan decided to exit part of its local custody business in the Asia-Pacific region, including Hong Kong and Taiwan. This decision is consistent with JPMorgan's strategy in other Asia-Pacific markets (such as Australia and South Korea), that is, to exit local custody business with a lower margin to optimize resource allocation and reduce costs.

In summary, JPMorgan's decision to exit local custody business in Hong Kong and Taiwan is part of its business strategy adjustment, aiming to optimize resource allocation, reduce costs and focus on more profitable global custody business.