BNP Paribas obtains regulatory green light to create an asset management joint venture in China

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HONG KONG, Oct 18 (Reuters) – BNP Paribas (BNPP.PA) has received approval from Chinese regulators to start building an asset management business with Agricultural Bank of China (AgBank) (601288. SS), the two companies announced, allowing the French company to tap into a $4 trillion market.

The China Banking and Insurance Regulatory Commission (CBIRC) has granted initial approval to allow BNP and AgBank, China’s third-largest lender by assets, to form a new joint venture, according to a public filing. ‘AgBank on Monday evening.

BNP has confirmed the initial approval, which takes the form of CBIRC formally accepting the two companies’ application for a final license to open the market.

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The French company will own a 51% stake in the company, while state-owned AgBank will own the rest.

Reuters reported in September last year that BNP’s asset management arm was in talks to form a wealth management business with a unit of AgBank, taking advantage of China’s opening up of its financial markets. to strangers.

BNP Paribas Asset Management and ABC Wealth Management, a wealth arm of AgBank, will fund the new platform, according to Monday’s filing.

Since China deregulated financial markets in 2019, allowing foreign asset managers to set up majority-owned businesses with local banks, a wave of foreign firms, including BlackRock and Amundi, have launched majority-owned units locally.

Other foreign companies such as Barclays and Allianz are also exploring this possibility and trying to find local partners.

The new platform will add to BNP Paribas’ 49%-owned asset management joint venture with brokerage firm Haitong Securities which primarily manages mutual funds. The French lender also owns 16.3% of the shares of the Chinese bank Nanjing.

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Reporting by Selena Li; Editing by Sumeet Chatterjee and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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