China-based Founder Securities is, reportedly, planning to sell its stake in Credit Suisse Founder Securities, a joint venture (JV) formed between Founder Securities and Swiss bank Credit Suisse, as it plans to acquire Minzu Securities, a China-based investment-banking business.
The move by Founder Securities comes a week after the Chinese government made policy changes that portend the end of 14-month ban on initial public offering that had decreased brokerages’ investment-banking revenue.
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Formed in October 2008, the JV did not make much profits, reported Reuters.
Assets of Credit Suisse Founder Securities at the end of June 2013 were at CNY884 million (US$145 million) and net loss of CNY10 million (US$1.64 million) in the first six months of 2013.
Other banks such as Deutsche Bank, Citi and JPMorgan have also set up joint ventures in the country under the rules where foreign banks must own minority stakes in the JV with local securities firms.
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