China Allows in First Foreign Investment Bank

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Last updated at: (Beijing Time) Friday, March 08, 2002

China Allows in First Foreign Investment Bank

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BNP Paribas, a French banking group, has got permission to set up joint-venture investment bank in Beijing, being the first foreign investment bank allowed in China after the nation's WTO entry, according to China Economic Times. While BNP says this is a milestone in investment bank industry.

BNP chose Wuhan-based Changjiang Securities Corp. Ltd as its partner, and Haier, China's biggest electronic group, will become a major shareholder of the joint venture.

This is a signal that China is willing to open its investment bank business, financial experts say. More agreements may be reached soon, for China Industrial and Commercial Bank is seeking for foreign partners who have branches in Hong Kong, and Bank of China is exercising similar strategy via its HK branches.

Most Chinese companies in Hong Kong and New York are controlled by China International Capital Corporation Limited (CICC), a joint venture established in 1995 by China Construction Bank and Morgan Stanley International Incorporated. The cooperation remains firm due to remarkable yielding of profits.

BNP's joint venture may still under the control of CICC, but its shareholder Haier Group would bring many businesses for it.

Backgrounder: BNP Paribas

A powerful efficient financial services group created through a successful merger, with solid roots in Europe, leading positions in Asia and an active presence in the United States.

-- The 2nd most profitable bank in the euro zone, with net income of EUR 4.12 billion for the year 2000, up 57.7% on 1999 or 26.3% before restructuring costs.

-- Sustained profitability growth, with a return on equity of 20.9% and a cost/income ratio of 64.2%, making BNP Paribas one of the most efficient banks in Europe.

-- Operations in 87 countries.

-- A staff of 80,000, including 61,000 in Europe.

-- 3 core businesses :

Corporate and Investment Banking

Private Banking, Asset Management, Securities Services and Insurance

Retail Banking

BNP Paribas Capital spearheads the Private Equity business. BNP Paribas also offers a comprehensive range of property-related products and services in France and has teams specialised in managing portfolios of quoted stocks and sovereign risks.

By PD Online staff member Li Heng

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