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January 6, 2022updated 14 Feb 2022 10:58am

HSBC’s China brokerage joint venture partner to divest 39% holdings

Qianhai Financial, the China securities brokerage joint venture (JV) partner of HSBC, is reportedly looking to offload most of its equity ownership.

The British lender is expected to bid for the holding as it looks to expand its footprint in China as well as in the broader Asia, Reuters reported, citing a source with knowledge of the matter.

According to a filing with Shenzhen United Property and Equity Exchange, Qianhai is auctioning 39% ownership of HSBC Qianhai Securities with an asking price of $198m (CNY 1.26 bn).

The auction is set to expire on 21 January 2022, the exchange filing showed.

The state-owned Qianhai holds 49% of the unit while the remainder is held by the British lender. The unit posted $21.20m loss in 2021.

HSBC did not comment on the news.

The bank secured Chinese regulatory approval for the JV in 2017, becoming the first overseas player to own a majority holding in a Chinese brokerage.

HSBC recently secured a regulatory nod in China to obtain full ownership of its insurance JV.

In January 2021, the bank established a fintech subsidiary in Shanghai in a bid to ramp up its business in mainland China.

HSBC Fintech Services (Shanghai) Company Limited is said to be the first fintech subsidiary opened by a foreign financial institution in China.

Meanwhile, a slew of foreign firms are looking to beef up their holdings in their Chinese JV after the country first allowed foreign-majority ownership in some financial businesses in 2019.

US banking major Morgan Stanley is also planning to boost its stake in its Chinese brokerage JV by 4.06% to 94%, according to an exchange filing by the bank in December 2021.

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