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April 15, 2019

Credit Suisse eyes controlling stake in its China securities JV

By Jamie Crawley

Credit Suisse intends to increase its shareholding in its China securities joint venture (JV), having reached an agreement with Founder Securities Co. Ltd, subject to regulatory approval.

The Swiss investment bank stake in Credit Suisse Founder Securities Limited (CSFS) is expected to increase from a third to just over half by way of capital injection.

Founder Securities’s stake in CSFS will shrink to 49%.

CSFS was established in 2008 to focus on servicing clients in the domestic China market, including underwriting A-shares, foreign investment shares, and government and corporate bonds.

CSFS is headquartered in Beijing and also operates a securities brokerage business in Shenzhen Qianhui since 2016.

“Credit Suisse has a long-term commitment to China, having had a presence in the country for more than 30 years,” a statement from the bank has said.

“During that time, Credit Suisse has established a strong Greater China franchise, with a market leading franchise across equities, investment banking & capital markets and private banking.”

Credit Suisse are following the lead of fellow Swiss banking giant UBS, which grew its stake in its own China securities JV to 51% in December.

This trend owes itself to an end to rules by Beijing dictating that global investments banks could own no more than 49% of joint ventures in China.

HSBC are another bank to have recently taken advantage of this.

 

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