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Business
Citigroup relinquishes stake in Chinese JV to form a new majority-owned one
CKN
2019/01/09 02:33:38
2,508
China's News, China's Financial News, Citigroup

Jan 09, 2019 (China Knowledge) - Citigroup has decided to sell its stake in its Citi Orient Securities joint venture (JV) in China to its Chinese partner Orient Securities in favor of setting up its own brokerage in the country.

The deal has been approved by Orient’s board and is now awaiting approval from China’s securities regulator and state asset regulator.

Following regulatory changes in China where foreign companies are now allowed to have majority stakes in onshore securities businesses, Citigroup now hopes to take advantage of the new ruling to have a majority-owned domestic securities JV to pursue a wider business scope to support its clients.

UBS Group recently became the first foreign company to take control of its securities business in China under the new rules. In addition, JP Morgan Chase and Japan’s Nomura Holdings have also made similar applications for majority-owned securities businesses in China.

Global investment banks have long lobbied for the lifting of the rule as been limited to a 49% ownership posed problems to them when integrating their Chinese business with their global operations.

Citi Orient which was set up in 2012 reported net profits of RMB 128 million for the first half of 2018, falling from RMB 188 million during the same period in 2017 following a rough year for the Chinese stock market.

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