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January 5, 2021

JPMorgan in discussions with China bank for wealth management JV

By Amala Johney

JPMorgan is reportedly in initial talks with China Merchants Bank to set up a Chinese joint venture (JV) in the wealth management space.

The bank is looking to launch an entity, further expanding its strategic partnership with the bank signed in 2019, according to Bloomberg.

While the two parties are yet to decide on the ownership, JPMorgan is not likely to have control, the people familiar with the matter told the publication.

The plan is not yet finalised and could also collapse, the sources added.

JPMorgan Asset Management and China Merchants Bank did not comment on the development.

JPMorgan’s China moves

In November last year, JPMorgan reportedly decided to almost double the number of private bankers in Singapore over the next two years, who serve rich Chinese clients.

The same month, JPMorgan raised its stake in its China securities JV to 71% from 51%.

Last June, the China Securities Regulatory Commission (CSRC), the country’s securities watchdog, cleared the application of JPMorgan to operate the first entirely foreign-owned futures business in the country.

In 2019, the company received the final regulatory approval to open its majority-owned securities JV in China.

China moves by other firms

The opening of China’s $53trn economy has tempted international banks to solidify their presence in the region and capitalise on the evolving financial space.

The Chinese financial market is anticipated to grow by $30trn in the next two years.

Recently, a Chinese unit of German banking group Deutsche Bank reportedly obtained a domestic fund custody licence, in the latest sign of China’s financial services sector liberalisation.

Last month, American investment bank Goldman Sachs signed an agreement to take 100% control of its securities JV in China.

In November 2020, Pictet Asset Management, the asset management arm of Geneva-based Pictet Group, established a unit in Shanghai in a bid to tap the evolving fund market in China.

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