Credit Suisse looks to take full ownership of China joint venture

July 9, 2020.

said it’s eyeing full ownership of its Chinese securities joint venture just one month after claiming a majority stake in the entity, as the lender looks to expand its presence in China. 

The Swiss bank’s Asia Pacific CEO Helman Sitohang said it also expects to hire more staff in China and that it considers the country its most significant business opportunity, according to a bank spokesperson. The news was first reported by Reuters.

Credit Suisse in April was granted regulatory approval to raise its stake in Credit Suisse from 33.3% to 51% through a capital injection. It completed the transaction in June and appointed investment banker Janice Hu as chairwoman of the entity to steer its mainland strategy. 

The lender established the Beijing-based outpost in 2008 with local partner Founder Securities to gain access to the mainland market while complying with regulations that only allowed foreign companies to own a minority stake in securities businesses. 

Regulators in 2018 eased those rules, lifting the foreign ownership cap to 51%, and in April 2020 completely scrapped the limit. Several major investment banks have already moved to claim a majority stake in their securities businesses, and some have said they’re intent on gaining full ownership soon. 

“Credit Suisse has a long-term commitment to China. We believe the securities entity will enable us to develop our onshore capabilities,” Sitohang said in April. “We intend to continue to invest in this important market to bring our integrated capabilities and our comprehensive range of financial products and services to both domestic and international clients in China.”

The bank last month hired a new head of wealth management for mainland China, Jing Wang, poaching her from China Merchants Bank, and Sitohang said they’re looking to fill other key positions in the next few months. 

Sitohang also stressed that the bank’s push in mainland China does not signal a retreat from Hong Kong, whose future as a global financial hub has been thrown into uncertainty after Beijing imposed a strict new security law on the city state. As civil unrest grows in the territory, which has long served as a gateway for commerce in mainland China, some banks have mulled moving their operations to other financial hubs like Singapore or expanding onshore. 

However, Sitohang told Reuters, “There will be no changes” to the bank’s presence in Hong Kong, adding that it is an “integral part of our footprint for China overall.”