JPMorgan Raises Stake in China Securities Venture to 71%

JPMorgan Chase & Co. raised the stake in its Chinese securities joint venture to 71%, taking a step closer to becoming the first foreign bank to attain full ownership of a firm as the country opens its $50 trillion financial market.

The bank bought a 20% stake put up for sale by Shanghai Waigaoqiao FTZ for 177.7 million yuan ($26.6 million), according to information posted on Shanghai United Assets and Equity Exchange. The transaction was completed on Oct. 23. JPMorgan couldn’t immediately be reached for a comment.

After years of only allowing global banks to hold minority stakes in Chinese ventures, Beijing this year gave the green-light for Wall Street and European rivals to take full ownership in the country. With full control, the banks will be able to better set strategy and direct capital in a push into China’s vast financial market.

Firms such as JPMorgan, Goldman Sachs Group Inc. and UBS Group AG are adding staff and office space and expanding in everything from futures and brokerages to asset management with billions in potential profits to chase in the world’s most populous nation. Goldman Sach’s President John Waldron said last month it will apply for 100% ownership of its Chinese securities venture as soon as further guidance is released.

JPMorgan’s China securities venture was ranked last by assets as well as revenue in 2019 among 98 firms tracked by Securities Association of China. The Shanghai-based entity posted a loss of 85.9 million yuan last year, the association’s data showed.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.