Standard Chartered ‘doubling down’ on China wealth opportunities despite tax pivot

Standard Chartered is increasing its focus on wealth management in China, Hong Kong, and Taiwan, according to its CEO for wealth and retail banking, Judy Hsu Chung-wei. She spoke at a media briefing, emphasizing that China's Greater China region, including Hong Kong, mainland China, and Taiwan, is one of the world's most important wealth corridors. This strategy is part of the lender's broader plan to expand its wealth centres, hire more talent, and invest in technology platforms in these markets.

Hong Kong, Standard Chartered's largest single market, contributes a third of its first-half pre-tax profit, and Hsu highlighted it as a key role in the bank's expansion plan. The lender has opened seven Hong Kong wealth centres, accounting for a third of its wealth centres. A third are located in mainland China and Taiwan, with another third in Hong Kong.

Standard Chartered plans to invest $1.5 billion in its wealth business between 2025 and 2028, with a significant portion allocated to Hong Kong and Singapore. Beijing recently implemented stricter tax rules on cross-border investment, including a 20% levy on gains from offshore insurance policies in several mainland cities, such as Shanghai. Despite these tax changes, Hsu maintains that they will not hinder long-term growth in cross-border investment.

Clients have shown no change in behavior, and the bank has seen a 38% year-on-year increase in wealth-management revenue to $2.1 billion in the first half. Net new money for affluent clients, those with at least $25,000, reached $33 billion by the end of June. The bank added 150,000 new affluent clients and 150,000 existing clients invested more assets under management during this period.

Hsu also discussed the bank's continued focus on the United Arab Emirates (UAE) and other Persian Gulf countries, despite the ongoing US-Israel war on Iran. She mentioned launching a single-relationship-manager service for priority banking clients with at least $1 million in assets under management in the UAE. The service will also handle the client's accounts in other markets like Singapore or India. Hsu expressed her support for tax incentives introduced by Hong Kong and Singapore governments to attract talent.