Industrial Bank Co Ltd will team up with France's Natixis Global Asset Management SA and a local shareholder to establish a mutual fund management firm.
The Fujian-based bank will take a controlling stake of 57 percent in the planned firm that has registered capital of 300 million yuan (US$42.2 million), the bank said in a statement filed to the Shanghai Stock Exchange today.
The French partner will own 33 percent and Xiamen C&D Inc will hold the remaining 10 percent.
"It is the latest trend for banks to enter the mutual fund management industry to diversify their income sources against the country's tighter credit control," said Zhang Qi, an analyst with Haitong Securities Co.
"Also, foreign fund management companies are seeking Chinese partners to tap the fast-growing capital market in China."
Last year, Credit Suisse signed a memorandum of understanding with China's Founder Securities Co, while Morgan Stanley also reached a strategic cooperation agreement with Shanghai-based China Fortune Securities.
China had approved the establishment of four joint-venture brokerage firms and 28 mutual fund management firms on the mainland by the end of last year.
The board of the Industrial Bank Co Ltd, partly owned by a unit of HSBC Holdings Plc, also gave the nod to set up a two-billion-yuan financial leasing company, the statement said.
It plans to buy a 20 percent stake in Jiujiang City Commercial Bank.
Industrial Bank Co Ltd reported a net profit of 8.58 billion yuan last year from 2006's 3.79 billion yuan.
(Shanghai Daily March 20, 2008)
