HSBC has finally received the go-ahead for its joint venture from China’s securities regulator.
The London headquartered lender is the first foreign bank to be granted approval for majority-owned Joint-Venture (JV) business.
The timing of the decision will be welcome as HSBC faces uncertainties over the ongoing Brexit negotiations in its home town of London.
Pivot to Asia
HSBC's JV partnership is with the state-backed Qianhai Financial Holdings and is majority-owned by the U.K. bank, in contrast with most other Sino-foreign investment banking partnerships where the Chinese partner retains control.
The partnership is a key part of the bank's ambition to grow annual profits in the fast-growing southern region of China, part of its well versed «Pivot to Asia» mantra, allowing it to trade as well as underwrite stocks and bonds for Chinese firms more freely than other foreign rivals.
Doors Opening
In a statement HSBC said, the new entity HSBC Qianhai, will be able to conduct equity research and brokerage activities on locally listed securities, equity and debt underwriting and sponsoring, and advising on domestic and cross-border corporate mergers and acquisitions.
In recent speeches mainland Chinese officials have signaled their intention to open up the financial industry. Protecting domestic firms from outside competition makes them lazy, People’s Bank of China Governor Zhou Xiaochuan said earlier this month.
