SHANGHAI: Wall Street bank JPMorgan said on Monday that it had won final approval to set up a wholly owned unit in China to strengthen its wholesale banking business in the world\u2019s fastest growing major economy. <\/p>\n
This move will make JPMorgan the second US bank to incorporate in China, after Citigroup did so early this year, while more than a dozen foreign banks queue to secure regulatory approval for their China-incorporated units. <\/p>\n
Most foreign banks choose to incorporate in China because they want to tap the country\u2019s retail banking sector through fast branch expansion across the country. Local incorporation makes it much easier for foreign banks to apply, to open new branches and offer a full range of local currency-denominated retail banking services to Chinese customers. <\/p>\n
However, JPMorgan said it would still focus on its wholesale banking business \u2014 such as trade finance, cash management and financial derivatives \u2014 but may tap the retail market when it finds the right opportunity. <\/p>\n
\u201cWe do see that China\u2019s consumer banking and card markets have great potential for growth and we are very optimistic on the future growth of the market,\u201d Charles Li, JPMorgan China chairman, said. \u201cWe would like to consider exploring the opportunities if we could find the right approach.\u201d <\/p>\n
Besides expanding the wholesale banking business in China, JPMorgan is making efforts to win underwriting deals for Chinese companies\u2019 overseas listings. Currently, JPMorgan does not have any retail business outside the United States. China fully opened its banking markets to overseas lenders late last year, as part of Beijing\u2019s commitment to the World Trade Organisation, which it joined in 2001. <\/p>\n
Foreign banks not incorporated domestically are not allowed to issue bank cards independently and are required to impose a minimum deposit of 1 million yuan ($1,32,200) on retail customers. \u201cThe local incorporation won\u2019t immediately accelerate the pace of growth and lead to aggressive recruiting of branch expansion,\u201d said Mr Li. <\/p>\n
\u201cHowever, there is no doubt that the incorporation will form a strong foundation for progressive and long-term expansion.\u201d JPMorgan will locate the headquarters of its China-incorporated subsidiary in Beijing, making it the first foreign bank to incorporate in China\u2019s capital instead of Shanghai, the country\u2019s financial hub. <\/p>\n
JPMorgan currently operates three branches in first-tier Chinese cities including Beijing, Tianjin and Shanghai. \u201cAfter local incorporation, all the three branches will be fully licensed for local and foreign currencies and products, and all branches will have a derivatives licence,\u201d Carl Walter, JPMorgan China\u2019s chief operating officer said.<\/p>\n","protected":false},"excerpt":{"rendered":"
SHANGHAI: Wall Street bank JPMorgan said on Monday that it had won final approval to set up a wholly owned unit in China to strengthen its wholesale banking business in the world\u2019s fastest growing major economy. This move will make JPMorgan the\u2026<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[19],"tags":[3],"class_list":["post-1116","post","type-post","status-publish","format-standard","hentry","category-bankingfinance","tag-null"],"yoast_head":"\n