China plans to grant investment banking licenses to lenders: Caixin

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

), 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.ICBC declined to comment. CSRC didn’t return an emailed request for comment.

Regulators’ desire to break the wall between commercial and investment banking was fueled by mounting competition from foreign players, according to Caixin. China scrapped foreign ownership caps in the brokerage business earlier this year as part efforts to fully open its $40 trillion 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 and Bank of Communications , operate investment banking through their Hong Kong subsidiaries.

 

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