(Bloomberg) -- Citigroup Inc. and JPMorgan Chase & Co. were among international firms that asked their wealth managers to reconsider travel to China, according to people familiar with the matter, as UBS Group AG removed its curbs.
A UBS spokesman said on Tuesday the bank had lifted its own travel restrictions. The moves came after a UBS wealth manager’s departure from China was delayed last week. Julius Baer Group Ltd. also barred trips by its relationship managers.
Restrictions on travel to China are a tough choice for global banks, with the world’s second-largest economy creating more billionaires by the week. The UBS wealth manager, who focuses on China, had delayed her departure after being asked to meet with local officials on an unknown matter, a person familiar with the issue said. UBS has been told the meeting is due to happen this week, said the person, who asked not to be named because the details aren’t public.
“China is a very big wealth market where a lot of people are trying to diversify their investments inside and outside of the country,” Chen Shujin, financial analyst at Huatai Securities Co. in Hong Kong, said by phone. “At the same time, this is not an easy task given its capital controls. Foreign firms trying to tap this business are facing different obstacles.”
The travel advice given by Citigroup and JPMorgan was earlier reported by Reuters, which said that Standard Chartered Plc had also asked its private banking employees to restrict travel to China. A spokeswoman at Standard Chartered declined to comment, as did representatives for Citigroup, JPMorgan and Julius Baer.
Not every bank in the region imposed restrictions. A Credit Suisse Group AG spokesman said no travel ban was in place for its staff, while DBS Group Holdings Ltd. and Morgan Stanley reminded employees of their travel policies and guidelines, according to people familiar with the matter.
There’s a vast private banking opportunity in China. The collective fortunes of China’s uber-rich grew a staggering 65 percent, or $177 billion, in 2017, according to the Bloomberg Billionaires Index, a ranking of the world’s 500 wealthiest people.
What has long looked like a golden opportunity -- the second-biggest pool of ultra-rich people in the world -- comes with strict regulations, tight capital controls and competition from domestic financial brands. The Chinese government is also cracking down on riskier, higher-yielding products, which has given global banks a reason to reevaluate onshore operations.
UBS’s travel restriction only affected those who help manage money for clients and hadn’t been imposed on other business units. The bank estimates a new billionaire is minted in China every two days.
The Swiss firm is the largest wealth manager in Asia, with assets under management of $383 billion at the end of 2017, according to Asian Private Banker, followed by Citigroup, Credit Suisse and HSBC Holdings Plc.
--With assistance from Patrick Winters and Donal Griffin.
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