Some of the largest American lenders are reportedly scaling down ambitions and expansion plans in China due the changing business environment.
Goldman Sachs and Morgan Stanley are the amongst the US lenders seeking to scale back expansion plans and profit targets in China, according to a «Bloomberg» report citing unnamed sources.
«The best opportunities for making outsized profits in the country are over», the sources said, highlighting increased scrutiny on credit risks, market risks, liquidity risks and potential US sanctions on clients.
Goldman Sachs
Goldman revised projections on its five-year plan after China’s business environment «drastically changed».
The bank has let go more than one-tenth of its workforce on the mainland after doubling its headcount to over 600, the report said.
Morgan Stanley
At Morgan Stanley, the bank is now opting not to build an onshore brokerage unit for the time being, instead making a smaller investment of about $150 million on derivatives and futures businesses. As soon as this week, the bank is also planning another round of job cuts that will affect 7 percent of its Asia Pacific investment bankers.
JPMorgan is also one among other rivals that have reduced headcount dedicated to China, the report added.
In total, JPMorgan, Citi, Bank of America and Morgan Stanley have a combined exposure of $48 billion to China in 2022, down 16 percent year-on-year.
