American banking giant JP Morgan is preparing to shutter its wealth management business in Mexico, Bloomberg has reported, citing unnamed sources.
JP Morgan similarly exited Brazil last year, referring its wealth clients to Banco Bradesco SA. In Mexico, it will transfer the existing accounts to BBVA, the Spanish multinational with extensive operations in the country.
President Andrés Manuel López Obrador’s (AMLO) socialist policies and the growing tendency of Latin Americans to seek out money managers in international financial hubs were the two main factors behind the decision, the newswire added.
However, JP Morgan will continue its investment banking, trading, and treasury services in Mexico, but it will shutter its offices in the country, agreeing to offer the service from outside.
Wealthy individuals are increasingly feeling unease in Mexico, with AMLO launching a crackdown on tax evaders.
Such persons shipped US$18.8 billion to foreign accounts last year, the most since 2016, reported Bloomberg, citing data from the country’s central bank.
JP Morgan often targets high-net-worth individuals for its wealth management service. The US financial services provider had never had retail operations in Mexico but it was the largest wholesale bank in the country.
The New York City-based firm is the third international bank to leave Mexico in the last three months, with the other two being Canada’s Bank of Montreal and the Israeli Mizrahi Tefahot Bank.