Wealth managers banking on China are ready for a systemic rethink of how much money they are pumping into the promising market, finews.com's editor-at-large Shruti Advani says in finews.com-TV.
Private banks including UBS and Citigroup have moved aggressively into China, with peers like Credit Suisse close behind. No firm has seen a sign of payoff from the big bets yet – and banks are asking themselves why.
«Perhaps there’s more systemic rethink needed when it comes to Asia,» finews.com editor-at-large Shruti Advani tells finews.com-TV in an interview. «It isn’t an ATM that you go and withdraw money from.»
China Loss-Making
She answers a flat «no» to whether anyone is making money in China: «No one’s trying to caveat it, China is very much investment phase for most major banks,» Advani said.
Private banks have tweaked their strategy in China depending on how they are faring elsewhere, she notes. «When you see numbers in Switzerland or more evolved markets coming under stress, banks tend to intuitively turn to China to make up that shortfall.»
China's dominance of the prime perch currently is for wont of anywhere else for wealth managers to put their money. «Despite the regulatory frustrations of doing business in China, banks are willing to invest,» says Advani, a long-time observer of the region and former editor-in-chief of specialty publication «Asian Private Banker».
