(Bloomberg) — Citigroup Inc. and some other international firms are asking their wealth managers to reconsider travel to China, as UBS Group AG removed similar curbs.
The moves come after a UBS wealth manager’s departure from the Asian country was delayed last week, according to a person familiar with the matter. UBS and Julius Baer Group Ltd. had imposed restrictions on staff travel after the incident, other people familiar with the matter had said on Friday.
Zurich-based UBS has now lifted the curbs, spokesman Rob Stewart said in an email Tuesday. “UBS would like to confirm that we allow all our staff to travel freely in and out of the country and it is business as usual for us in China,” he said.
A decision to restrict travel to China would be a tough choice for global banks as the world’s second-largest economy creates 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.
Citigroup’s curbs were earlier reported by Reuters, which said that Standard Chartered Plc and JPMorgan Chase & Co. have also asked their private banking employees to restrict travel to China. Spokeswomen at Standard Chartered and JPMorgan declined to comment. Representatives for Citigroup and Julius Baer also declined to comment.
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.
However, what has long looked like a slam-dunk opportunity—the second-biggest pool of ultrarich people in the world—also comes with cumbersome regulations and strong competition from homemade financial brands. The Chinese government is also cracking down on riskier, high-yield products, which has given global banks a reason to reevaluate onshore operations.
The UBS travel restriction only affected those who help manage money for clients and hadn’t been imposed on other UBS business units. The bank estimates a new billionaire is minted in China every two days.
“UBS has had a strong franchise in China for 30 years and remains fully committed to further developing our business on the mainland,” Stewart said.
UBS is the largest wealth manager in Asia, with total assets under management of $383 billion at the end of 2017, according to Asian Private Banker. It’s followed by Citigroup, Credit Suisse Group AG and HSBC Holdings Plc.
(Updates with UBS decision to lift curbs in second paragraph.)
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