JPMorgan Chase is reportedly withdrawing from its private banking operations in Mexico and has entered into an agreement to refer the business to BBVA Mexico.

The move to exit Latin America’s second-largest economy comes as rich customers look to transfer their funds in some Latin America markets to world capitals, reported Bloomberg citing people familiar with the issue.

This was partly triggered by president Andres Manuel Lopez Obrador’s populist policies that includes a tax clampdown.

The bank will continue to cater to its clients from Mexico via its platform outside of the country, according to the report. The news was not confirmed by the bank.

CNBV’s data reveals that JPMorgan is Mexico’s largest wholesale bank among the global giants.

It does not have a retail business in the country, with offshore accounts representing the bulk of its private-banking business in Mexico.

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The bank will retain its other operations in the country, such as investment banking, trading and treasury services, further stated Bloomberg.

Last year, JPMorgan said that it will exit private banking in Brazil and signed an agreement with Brazil’s Banco Bradesco to transfer its private banking clients to the Brazilian bank.

On the other hand, the bank is bolstering its operations in China, capitalising on its financial sector liberalisation strategy.

In 2020, JPMorgan increased its stake in its China securities joint venture (JV) to 71% from 51%.

Besides, last month, it was reported that the bank is in initial talks with China Merchants Bank to set up a Chinese wealth management JV.

Meanwhile, BNP Paribas Securities Services, part of the French banking group BNP Paribas, started operations in Mexico last year. The new business will offer valuation services, tax pricing and regulatory reporting, and daily accounting.