Factbox: Foreign investment banks with majority stakes in China units
16/01/2020 06:09
By Alun John
HONG KONG, Jan 16 (Reuters) - The world's biggest investment
banks will be able to wholly own their China securities
businesses from April 1 as the U.S.- China Phase 1 trade deal
accelerates a previous deadline for removing foreign ownership
caps by nine months.
International bankers believe a full ownership, or at least
a majority control, would allow them to make better use of their
global network to win market share in China. urn:newsml:reuters.com:*:nL1N29K1RI
China raised the cap on foreign ownership to 51% in 2018,
before which international banks were allowed to hold only
minority stakes in their Chinese joint ventures, which typically
offer a combination of securities underwriting, broking,
research and trading services.
Below is a list of major foreign banks and their stakes in
Chinese joint ventures:
ESTABLISHED
** UBS UBSG.S became the first foreign bank to own 51% of
its China joint venture under the 2018 rules. Three
government-affiliated investment vehicles also hold minority
stakes in the company, UBS Securities, in which UBS first
invested in 2006. urn:newsml:reuters.com:*:nL4N1Y54WS
** HSBC HSBA.L 0005.HK launched its own 51% joint
venture in late 2017 under a different set of rules that allow
Hong Kong-based companies special access to the mainland. It has
partnered with Qianhai Financial Holdings, a local government
investment vehicle. urn:newsml:reuters.com:*:nL4N1Y32H2
RECEIVED APPROVAL
** JPMorgan JPM.N received final approval from Chinese
regulators in December to set up a new majority owned securities
joint venture. JP Morgan Securities (China) has six
shareholders, including the Shanghai Waigaoqiao Free Trade Zone
Group 600647.SS , which owns 20%. urn:newsml:reuters.com:*:nL4N28S2O8
** Nomura 8604.T received a final regulatory approval in
November for its new majority owned joint venture, Nomura Orient
International Securities. It has two partners, including
manufacturing and services firm Orient International.
urn:newsml:reuters.com:*:nL3N2821PC
IN PROCESS
** Goldman Sachs GS.N applied for a majority ownership of
its existing joint venture, Goldman Sachs Gau Hua Securities, in
August 2018, though, unlike most others, it already has
operational control of the company. It plans to fold some of the
operations of partner Beijing Gao Hua Securities into the JV.
urn:newsml:reuters.com:*:nL5N25H15W
** Morgan Stanley MS.N purchased the 2% stake it needed to
reach 51% ownership of Morgan Stanley Huaxin Securities in
August. The deal still needs regulatory approval. urn:newsml:reuters.com:*:nL4N24Y1FH
** Credit Suisse CSGN.S plans to boost its stake in Credit
Suisse Founder Securities Ltd to 51% from 33.3% through capital
injection, it said in April 2019. The plan is subject to
regulatory approval. urn:newsml:reuters.com:*:nL5N21X3R4
PLANNING STAGE
** Citigroup C.N plans to set up a wholly owned securities
business in China after completing its exit from an existing
joint venture in which it has a minority stake. urn:newsml:reuters.com:*:nL3N2701NV
** Societe Generale SOGN.PA intends to create a wholly
owned subsidiary after ditching earlier plans for a joint
venture. urn:newsml:reuters.com:*:nL3N26Z0PH
(Reporting by Alun John; Editing by Anil D'Silva)
((Alun.John@thomsonreuters.com; +852-28415827;))