Further deepening its China push, the asset banking arm of banking giant JPMorgan is taking a 10% stake in the wealth management unit of China Merchants Bank.

Under the agreement, JPMorgan Asset Management (Asia Pacific) would pay around $415m for the stake in CMB Wealth Management.

The deal, which awaits regulatory nod, marks the first time a Chinese bank has been open to allowing a foreign player have any control over a wealth unit, reported The Wall Street Journal.

China Merchants Bank will continue to hold the remaining 90% holding in its wealth arm.

“The investment would deepen the cooperation between the bank and the strategic investor and is good for CMB Wealth Management to enhance its internal governance,” Reuters reported China Merchants Bank as stating in a filing with the Shanghai stock exchange.

The latest development builds on the existing partnership between the Shenzhen-based bank and JPMorgan in 2019, when they agreed to collaborate on product development and investor education.

The news of JPMorgan being in initial talks with China Merchants Bank to set up a wealth management joint venture (JV) in China was reported earlier this year.

Meanwhile, last April, JPMorgan agreed to buy out its Chinese partner’s stake to get complete control of its China mutual fund JV.

The bank bought the 49% stake of Shanghai International Trust to raise its interest to 100% in the JV China International Fund Management (CIFM).

Later in 2020, JPMorgan raised its stake in its China securities JV to 71% from 51%.

China initiatives of other US firms

In September 2020, Citi became the first US bank to secure China fund custody licence.

Last December, Goldman Sachs signed an agreement to take 100% control of its securities JV in China.

Last year, BlackRock received the regulatory approval to establish a mutual fund arm in China and a wealth management JV with Temasek and China Construction Bank.

Meanwhile, in an exception to the trend of firms clamouring to gain access to the China market, Vanguard recently scrapped its plan to secure a mutual funds licence in China.