China plans to grant investment banking licences to lenders

An advertising board (L) showing a Chinese stone lion is pictured near an entrance to the headquarters (R) of China Securities Regulatory Commission (CSRC), in Beijing, China, in this September 7, 2015 file photo. REUTERS/Jason Lee/Files

China‘s securities regulator plans to grant investment banking licences to commercial lenders as part of efforts to breed industry behemoths in the face of fiercer foreign competition, business magazine Caixin reported.

A pilot scheme could involve at least two of China‘s largest banks getting the green light from the China Securities Regulatory Commission (CSRC) to conduct investment banking business on the mainland, according to Caixin.

The Industrial and Commercial Bank of China, the country’s top lender, submitted a plan to CSRC in late 2018 seeking to set up a securities unit with registered capital of 100 billion yuan, Caixin reported.

In contrast, Chinese brokerage giant Citic Securities has registered capital of 13 billion yuan.

ICBC declined to comment.

CSRC said in a statement on Sunday that several approaches were under discussion to help the “high-quality” growth of China‘s investment banking industry, which is key to expanding direct financing in China. But “whichever approach the government takes, there would be no big impact on the industry landscape”, CSRC said in a statement on its website.

Regulators’ desire to break the wall between commercial and investment banking was fuelled by mounting competition from foreign players, according to Caixin.

China scrapped foreign ownership caps in the brokerage business earlier this year as part of efforts to fully open its $40 trillion (32.4 trillion pounds) financial industry. Global investment banks including Morgan Stanley, Goldman Sachs and Credit Suisse have won regulatory approval for majority stakes in their Chinese ventures.

Currently, investment banking is off-limits to most Chinese banks, though Bank of China and China Development Bank control brokerage businesses onshore under special arrangements by the government.

In addition, many Chinese banks, including ICBC, China Construction Bank (CCB) and Bank of Communications (BoCom), operate investment banking through their Hong Kong subsidiaries.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.