JPMorgan raises stake in China securities venture to 71%

Date: 3 November 2020

Author: -

Source: Business Times


As China opens up its US$50 trillion financial market, JPMorgan Chase & Co has taken one step closer to becoming the first foreign bank to achieve full ownership of a Chinese firm as it raises its shares in its Chinese securities joint venture to 71 per cent.


According to information posted on Shanghai United Assets and Equity Exchange, the bank bought a 20 per cent stake put up for sale by Shanghai Waigaoqiao FTZ for 177.7 million yuan (S$36.3 million), completing the transaction on Oct 23.


After years of only allowing global banks to hold minority stakes in Chinese ventures, Beijing this year gave the green-light for Wall Street and European rivals to take full ownership in the country. With full control, the banks will be able to better set strategy and direct capital in a push into China's vast financial market.


Global banks has never been allowed to hold anything more than minority stakes. Beijing gave the green-light this year for Wall Street and European rivals to take full ownership in the country. The autonomy allows the banks for more strategic planning with more direct capital into China’s vast financial market.


Firms such as JPMorgan, Goldman Sachs Group Inc and UBS Group AG are adding staff and office space and expanding in everything from futures and brokerages to asset management with billions in potential profits to chase in the world's most populous nation. Goldman Sach's President John Waldron said last month it will apply for 100 per cent ownership of its Chinese securities venture as soon as further guidance is released.


JPMorgan's China securities venture was ranked last by assets as well as revenue in 2019 among 98 firms tracked by Securities Association of China. The Shanghai-based entity posted a loss of 85.9 million yuan last year, the association's data showed.


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