BNP Paribas Plans China Broking and Wealth Expansion
(China - 18 June 2019) France’s largest bank, BNP Paribas, will enter into brokerage and wealth management services in China after the ongoing trade war forced Beijing to speed up the liberalisation of capital markets. The move has created unprecedented opportunities for foreign banks in the world’s second largest economy.
The reforms mean overseas banks can play a bigger role in serving China’s domestic market as more international capital flows in. BNP Paribas was considering an expansion into securities trading in China, adding to its corporate advisory and equity fundraising services. BNP Paribas has had a presence in China dating back to 1860 when it opened its first office in Shanghai. The group has nearly 500 staff based in the country with services ranging from banking, financing and advisory.
The bank holds an 18 percent stake in Bank of Nanjing and a 49 percent share in asset management company HFT Investment Management, under a JV with Hitong Securities. In Q2 2019, BNP Paribas signed an agreement to partner with LianLian Pay on its eCommerce business in China. Since Q4 2018, Chinese authorities have approved plans by JPMorgan, UBS and Nomura to take majority stakes in local securities ventures however these JV's still cap foreign ownership at 51 percent.
In Q4 2018, BNP Paribas received a license to act as lead underwriter on yuan-denominated bonds (panda bonds) issued by foreign companies. Foreign companies are increasingly seeking to tap China’s domestic bond market (http://eastandpartners.com/publications/banking-news/chinese-bond-market-attraction-grows-among-foreign-investors) to support their expansion needs on the mainland. BNP Paribas is the third international bank to receive a panda bond licence after HSBC and Standard Chartered.
“We are studying about having a securities joint venture. We are looking for a joint venture partner to apply for a securities license, but it takes time,” said C G Lai, BNP Paribas China CEO.
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