Credit Suisse has been granted approval to take a majority stake in its Chinese securities joint venture, the bank said Friday, as banks rush to gain more access to China’s lucrative market while Beijing regulators ease restrictions on foreign firms.
The Swiss bank said it will increase its stake in Credit Suisse Founder Securities from 33.3% to 51% through a capital injection. The stake held by its local partner, Founder Securities Co., will fall to 49%.
Beijing-based Credit Suisse Founder Securities was founded in 2008 and provides underwriting and financial advisory services. In 2016 it began operating a securities brokerage business in the city of Shenzhen’s industrial zone.
"This is a significant milestone in our China strategy that complements our franchise globally as well as in Asia Pacific," CEO Thomas Gottstein said in a statement.
"As a leading global wealth manager with strong investment banking capabilities, one of our long-term goals is to make a meaningful contribution to the development of China's financial markets as the country continues to open up its domestic financial market," Gottstein said.
Credit Suisse, which applied to take controlling stake of its joint securities firm last April, is the latest bank to receive approval from the Chinese Securities Regulatory Commission. The regulatory agency lifted its cap on foreign bank ownership to 51% in late 2017 and has continued to ease restrictions.
Rival Swiss lender UBS was the first foreign bank to gain a majority stake in a Chinese securities company in November 2018. Japanese brokerage Nomura Holdings and JP Morgan won approval last year, and Goldman Sachs and Morgan Stanley announced in March they were also cleared to take majority ownership of their joint ventures.
China pledged to entirely remove its foreign equity caps on securities firms and mutual funds by April 1 in its January trade deal with the United States, paving the way for foreign entities to own the entirety of such firms in the future.