BNP Paribas in wealth management JV talks with China's AgBank -sources
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[September 02, 2021] SHANGHAI
(Reuters) -BNP Paribas' asset management arm is in talks to form a
wealth management venture with a unit of Agricultural Bank of China (AgBank),
sources said, as the French firm pursues a bigger slice of China's $19
trillion market.
China further deregulated its financial markets in 2019, allowing
foreign asset managers to form majority-owned wealth management ventures
with local banks. Foreign expertise can help Chinese lenders grow their
investment capabilities as they phase out risky shadow banking
businesses.
Two sources with direct knowledge of the talks told Reuters that the
investment management arm of BNP Paribas will hold a majority stake in
the planned venture with AgBank's wealth management subsidiary.
BNP Paribas declined to comment. AgBank, China's third biggest lender by
assets, did not immediately return an emailed request for comment.
French rival Amundi and U.S. fund giant BlackRock have already formed
Chinese wealth management ventures, while Schroders and Goldman Sachs
are following suit.
Meanwhile, JPMorgan Asset Management has partnered with China Merchants
Bank's wealth management unit.
BNP Paribas Asset Management is in talks to form the venture with
AgBank's Agricultural Bank of China Wealth Management Co, the sources
said, without giving financial details.
BNP Paribas AM already owns a Chinese mutual fund venture, and the new
alliance would give it access to AgBank's massive retail customer base.
"Getting the wealth management license is worth the effort," a source
with direct knowledge of the talks said.
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The BNP Paribas logo is seen at a branch in Paris, France, February
4, 2020. REUTERS/Benoit Tessier
Amundi initially discussed venture plans with AgBank, but eventually chose Bank
of China as its partner, another said.
AgBank and other major state banks face political pressure to form wealth
management JVs, sources said, an indication of China's willingness to open up
which could help Chinese banks build globally competitive asset management
businesses.
BNP Paribas AM manages 489 billion euros ($579 billion) in assets, and offers a
comprehensive range of active, passive and quantitative investment solutions.
It's also a major player in sustainable investing, which Beijing is aggressively
promoting.
AgBank's wealth management unit, set up in July 2019, had 1.1 trillion yuan
($170.24 billion)in wealth management products at the end of June.
China's asset management market will grow to 210 trillion yuan in 2025, from 122
trillion yuan at the end of 2020, China Everbright Bank and Boston Consulting
Group estimate.
($1 = 6.4613 Chinese yuan renminbi)
($1 = 0.8447 euros)
(Reporting by Samuel Shen, Cheng Leng and Andrew Galbraith; Editing by Edmund
Blair and Alexander Smith)
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