Citigroup teamed up with its Chinese partner yesterday to set up a securities joint venture to tap China's rising capital market.
Subject to regulatory approval, the United States bank and Orient Securities Co will set up Citi Orient Securities Co in Shanghai.
The joint venture will engage in investment banking business in the Chinese domestic market, including equity, debt underwriting and advisory services. The two partners will also explore cooperation in other areas such as research and training.
Shanghai-based Orient Securities will own 67 percent in the new entity, with Citigroup taking the remaining 33 percent in line with existing Chinese regulations.
"This new partnership underscores our strategic commitment to China's capital markets and complements our well-established banking franchise in China," said Stephen Bird, CEO for Citi in Asia-Pacific.
Orient Securities, established in 1998, has more than 2,200 employees and is owned by a number of Shanghai's state-owned companies.
Citigroup, a major foreign bank in China with a presence in 11 cities, has helped raise more than US$40 billion for Chinese companies from international capital markets in the last five years, according to Dealogic.
On Wednesday, the Royal Bank of Scotland opened its securities joint venture in Wuxi in Jiangsu Province as it seeks to tap the world's biggest initial public offering market.
RBS holds 33.3 percent, the maximum allowed under Chinese law, in the joint venture, Hua Ying Securities Co. Wuxi-based Guolian Securities Co owns the remaining stake in the venture, which has a registered capital of 800 million yuan (US$123 million).
