BNP Paribas’ asset management arm is in discussion with a unit of Agricultural Bank of China (AgBank), to form a wealth management venture sources said, as the French firm seeks after a greater share of China’s $19 trillion markets.
China further liberalized its financial market sectors in 2019, permitting foreign asset managers to be majority owners in JV wealth management ventures set up with local banks. Foreign skills can help Chinese banks develop their investment abilities as they eliminate hazardous shadow banking business.
Two sources with direct information on the discussions disclosed to reporters that the investment management arm of BNP Paribas will hold a majority stake in the planned venture with AgBank’s wealth management unit.
BNP Paribas declined to remark. AgBank, China’s third greatest bank by assets didn’t promptly return a messaged demand for input.
French rival Amundi and U.S. fund giant BlackRock have set up Chinese wealth management ventures, while Schroders and Goldman Sachs are in process of doing the same.
In the meantime, JPMorgan Asset Management has joined together with China Merchants Bank’s wealth management unit.
BNP Paribas Asset Management is in discussion to set up the venture with AgBank’s Agricultural Bank of China Wealth Management Co, the sources said, without giving financial details.
BNP Paribas AM now owns a Chinese mutual fund venture, and the new partnership would give it admittance to AgBank’s monstrous retail client base.
“Getting the wealth management license merits the work,” a source with direct information on the discussions said.
Amundi at first talked about adventure plans with AgBank, yet in the end picked Bank of China as its partner, one more said.
AgBank and other significant state banks face political strain to form wealth management JVs, sources said, a sign of China’s ability to open up which could help Chinese banks assemble universally competitive asset management businesses.
BNP Paribas AM oversees 489 billion euros ($579 billion) in resources and offers a thorough scope of dynamic, detached, and quantitative investment solutions. It’s additionally a major player in sustainable investing, which Beijing is forcefully advancing.
AgBank’s wealth management unit, set up in July 2019, had 1.1 trillion yuan ($170.24 billion) in wealth management products toward the end of June.
China’s asset management market will develop to 210 trillion yuan in 2025, from 122 trillion yuan toward the end of 2020, China Everbright Bank and Boston Consulting Group project.
