DBS Joins Chinese Securities Joint Venture Trend

Tom Burroughes

3 September 2020

has won approval to create a joint venture securities company in China, part of a trend of banks entering such arrangements in the Asian economic giant.

The Singapore-based lender has received approval from the China Securities Regulatory Commission to establish DBS Securities (China) Limited. DBS will have a controlling stake in the entity, it said in a statement yesterday.

“The ability to set up a securities company in China represents yet another key milestone, enabling us to make available the best of DBS’ capabilities and offerings, and provide customers in China with a full range of onshore and offshore financial services,” Piyush Gupta, DBS Group chief executive said.

The JV, registered in Shanghai, will engage in businesses such as brokerage, securities investment consulting, securities underwriting and sponsorship, as well as proprietary trading.

The entity has registered capital of RMB1.5 billion. DBS has a 51 per cent stake in the JV. Other stakeholders are: Donghao Lansheng Investment Management Co (24.67 per cent); Shanghai Huangpu Investment Holdings (Group) Co (13.33 per cent); Shanghai Huiyang Asset Management Co (6.5 per cent), and Shanghai Huangpu Guidance Fund Equity Investment Co (4.5 per cent).

Other banks are making similar moves. In April, Chinese authorities approved Credit Suisse’s move to become a majority shareholder in its securities joint venture, enabling the Zurich-listed bank to ramp up activities in China. The JV, which is called Credit Suisse Founder Securities Limited, was set up in 2008 and is based in Beijing. Credit Suisse’s shareholding in CSFS will increase from 33.3 per cent to 51 per cent. In January 2019, Citigroup agreed to sell its stake in its Citi Orient Securities joint venture to its Chinese partner.

A few days ago, Japan’s Daiwa Securities Group, which received regulatory approval to launch a majority-owned joint venture in China, also has a 51 per cent stake in it. Beijing State-Owned Capital, an investment vehicle of Beijing municipal government, owns 33 per cent in the joint venture, while an investment arm of Beijing’s Xicheng District holds 16 per cent.