Global Banks Discussion with legal expert more negative than expected; Uncertainty on WM likely to persist

Research evidence excerpt

Global Banks Discussion with legal expert more negative than expected; Uncertainty on WM likely to persist

cashed-out proceeds from overseas IPOs or income (852) 2800-8552

katherine.lei@jpmorgan.com

earned through offshore subsidiaries are likely to be in scope of the ODI J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

framework where we have more concerns (vs HSBC/StanChart), which we see Morgan Broking (Hong Kong) Limited

creating uncertainty around new flows while existing offshore financial assets i.e. Lincoln Yu

back book AuM being in-scope would create potentially higher costs of (852) 2800 8523

compliance. Overall, this new regime will result in incremental friction to net lincoln.yu@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

new money generation, with additional compliance risk to the back book of Morgan Broking (Hong Kong) Limited

AUM, with cost of equity to remain elevated until we receive more regulatory

clarity in the coming months. We continue to estimate EPS at risk of 4%/5% Specialist Sales contact details:

for HSBC/StanChart which is partially priced, while disclosure for the Swiss Gigi Sparling - Specialist Sales -

banks is more limited and in our view, headwinds to HNW/UHNW net new European Financials

(44-20) 7134-0355

money are higher than our previous expectations. In the long term, we continue ghislaine.sparling@jpmorgan.com

to expect deeper penetration through the official channels (e.g. Connect

programmes) as China maintains its focus on opening its capital markets in a

disciplined way. Related research:

Global Banks: China investment

Please note that the speaker’s remarks do not represent the views of J.P. Morgan regulations triggering WM revenue

research. uncertainty for HSBC / STAN as well as

UBS / BAER (here)