Credit Suisse Becomes Majority Shareholder Of Chinese Securities Joint Venture

Swiss investment bank Credit Suisse has officially taken control of its securities joint venture in China. The bank is the latest foreign financial institution to take advantage of China's policy changes aimed at further opening up the country's financial services sector.

On Monday, Credit Suisse announced that it has increased its stake in its Chinese securities joint venture, Founder Securities (CSFS), from 33.3 percent to 51 percent. The purchase of the controlling stake was made right after the bank had received approval for the transaction from the China Securities Regulatory Commission (CSRC).

Apart from becoming the majority shareholder of its Chinese joint venture, Credit Suisse announced that it will be ramping up its investments in China moving forward. Heading the company's efforts in China will be CSFS's new chairwoman, Janice Hu, who is currently the vice-chairwoman for China at Credit Suisse. Hu has been tasked by the company to lead its China onshore strategy and future business plans.

Credit Suisse was one of the first international banks to offer its services in China, establishing a banking relationship with the Bank of China in the 1950s. Within the following decades, Credit Suisse had managed to create an entire business in China in sectors such as private banking, investment banking, capital markets, and equities.

In 2008, the company established its CSFS joint venture, offering various market services including underwriting, financial advisory services, and foreign investment shares.  In 2016, the company established a securities brokerage business in Shenzhen's Qianhai free trade zone.

Apart from CSFS, Credit Suisse also has another Chinese joint venture firm called ICBC Credit Suisse Asset Management.  As of the end of 2019, ICBC boasts total assets under management of more than 1.3 trillion yuan or roughly around $182 billion.

Since China had opened up its financial sector to foreign players, several foreign companies have already expressed interest in increasing their investments in the country. UBS was the first foreign bank to obtain approval from Chinese regulators to take control of its joint venture in 2018, right after the country passed new policy changes that effectively lifted the cap on foreign ownership limits.

 Goldman Sachs and Morgan Stanley have also both received approval to acquire a controlling stake in their respective Chinese joint ventures. Apart from lifting the foreign ownership limits for joint ventures, China also rolled out a number of other measures aimed at attracting further foreign investments. In July last year, the Office of Financial Stability and Development Committee and the State Administration of Foreign Exchange announced that they would be easing rules placed on foreign companies operating in the country.