HONG KONG/SHANGHAI (Reuters) – News of a foreign wealth manager being denied exit from China last week is raising concerns for global private banks, as they seek to tap trillions of dollars of wealth offshore in the face of Beijing’s growing curbs on overseas investments and outflows.
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The banker, a Singapore-based member of UBS wealth management business, was prevented from leaving Beijing and asked to meet local officials this week. Her identity is not known yet.
Although the purpose of the meeting is not publicly known, the news still led several banks including UBS, Citigroup, JPMorgan, Standard Chartered and BNP Paribas to ask private bankers to reconsider travel to China, people familiar with the matter said on Monday.
The Swiss bank on Tuesday rescinded its travel guidance and said in a statement it was business as usual in China. A UBS spokesman in Hong Kong declined to offer any further comment when contacted by Reuters yesterday.
The uncertainty around the UBS banker’s delayed departure comes at a tricky time for foreign investors in China as Beijing steps up curbs and increases scrutiny on offshore investments and outflows amid a weakening economy and currency.
And as authorities continue a sweeping campaign to root out graft, some bankers are beginning to get nervous about pursuing arguably one of the biggest opportunities worldwide in the business.
The UBS snag could prompt clients as well as their offshore advisers to be more cautious in making new investments, four senior private banking sources said.
“The immediate impact will be that everyone will be on pause for some time and try to figure out what all these means for China offshore wealth management business,” said a wealth management executive.