CBIRC has granted initial regulatory approval by formally accepting the BNP and AgBank’s application seeking a final licence to open a joint venture in the Chinese market
BNP Paribas, AgBank to start asset management venture in China. (Credit: BNP Paribas)
BNP Paribas has secured China’s Banking and Insurance Regulatory Commission (CBIRC) approval to establish an asset management venture with the Agricultural Bank of China (AgBank).
The regulatory approval will allow the French lender to benefit from the $4 trillion Chinese market, reported Reuters.
CBIRC has granted an initial approval, by formally accepting the BNP and AgBank’s application seeking a final licence to open a joint venture in the Chinese market.
The French lender will have a 51% stake in the new joint venture, while China’s state-owned lender AgBank will hold the remaining stake.
Reuters reported that BNP’s asset management arm is looking to form a wealth management joint venture with AgBank in September last year.
The move is the result of China opening its financial markets, allowing global asset managers to create majority-owned wealth management ventures with local banks.
In addition, foreign expertise can help Chinese lenders grow their investment capabilities as they phase out risky shadow banking businesses, said the publication.
In a separate development, BNP Paribas has reportedly contracted Barclays to sell the South African financial-services business RCS as part of a wider scaling back on the continent.
RCS, a provider of store cards, loans and insurance policies, was acquired by BNP for $147m, from Standard Bank Group and clothing retailer Foschini Group, eight years ago.
According to a Bloomberg report, the French lender has started a formal process to sell the credit and financial-services provider, operating in South Africa, Namibia and Botswana.
The agreement is part of the BNP’s plans to exit certain African units, as the company focuses on expanding its European and Asian operations, said the publication.
In July this year, BNP divested a lender in Senegal and sold a majority stake in its Ivory Coast business to the country’s government last month.
In addition, the group has exited from countries, including Guinea, Burkina Faso and Mali, and was reviewing certain peripheral locations, said reported Bloomberg.
Earlier this month, BNP Paribas signed an agreement to acquire Kantox, a fintech focused on the automation of currency risk management.
Kantox is said to provide a one-stop-shop, API-driven, plug-and-play solution, which emerged as a unique technology within the B2B cross-border payments sector.