Posted inBusiness moves

Deutsche Bank reportedly discussing China wealth JV

The firm is in talks with a top Chinese bank to take a majority stake in the entity, according to China media.
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Deutsche Bank aims to set up the joint-venture with the wealth management unit of Postal Savings Bank of China, according to Caixin, which cited “people familiar with the matter”.

The sources said that discussions are still underway with no agreement. Deutsche Bank declined to comment when FSA asked for confirmation of the talks.

If the plans materialise, Deutsche Bank would be the fifth overseas firm to form a wealth management partnership with a Chinese bank in order to gain access to mainland China’s rich individuals investors.

China’s Financial Stability Development Committee announced several measures in July 2019 to encourage overseas participation in the country’s financial markets. Included were the removal of foreign ownership limits for fund management companies in 2020 and allowing foreign control of domestic wealth management companies (WMC).

Many of China’s banks established WMC subsidiaries in response to regulatory reforms, creating opportunities for western asset managers.

Wealth management partnerships

The China Banking and Insurance Regulatory Commission (CBIRC) has so far approved the establishment of four joint-venture wealth management companies since the sector was opened to foreign investors in 2019.

France-based asset manager Amundi and BOC (Bank of China) Wealth Management, the subsidiary of Bank of China, were the first to gain approval from the CBIRC to set up a joint-venture under the new wealth management framework, and a partnership between Schroders and BOCOM (Bank of Communications) Wealth Management won approval in February 2021.

A venture between Blackrock and CCB (China Construction Bank) Wealth Management opened in May 2021 and a partnership between Goldman Sachs and ICBC Wealth Management followed in the same month.

Meanwhile, JP Morgan Asset Management expanded its “strategic partnership” in March 2021 with CMB Wealth Management, the WMC of China Merchant Bank, and UBS is reportedly discussing a wealth management partnership with China Life Insurance.

Part of the Mark Allen Group.