JPMorgan to Own 71% of its Chinese Securities Joint Venture

02 November 2020

    JPMorgan will own 71% of its Chinese securities joint venture after completing the transaction to buy a 20% stake from one of its local partners. 

     

    The deal appeared on the table in September, as the stake was put up for sale by state-owned Shanghai Waigaoqiao FTZ. JPMorgan was the sole candidate who was able to raise its ownership with priority rights in the securities joint venture, since other shareholders gave up their rights to purchase the 20% stake.

     

    The deal will help the bank come one step closer to the full ownership of its security business in China - a big achievement, given the complicated relationships between US and China. The transaction will further position JPMorgan as the foreign bank with the highest ownership stake in a mainland Chinese securities joint venture. It’s interesting to note that all main competitors, among which Morgan Stanley, Goldman Sachs and UBS plan to move to full ownership eventually, but do for now hold only 51% of their securities operations.

     

    A filing to the exchange on Monday showed JPMorgan paid 177 million yuan ($26.5 million) for the stake and the deal was officially complete on October 23rd.


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