Citigroup sets up China securities joint venture

BEIJING: Citigroup on Thursday announced a tie-up with Chinese securities firm Orient, giving the US bank a chance to compete with its foreign rivals in China's booming capital markets.

Orient Securities Co Ltd will have a 67 percent stake in the investment banking joint venture, which still requires Chinese regulatory approval, while Citigroup will hold the rest, the US firm said in a statement.

The joint venture will enable Citigroup, which has retail and corporate banking operations around China, to underwrite stocks and bonds for Chinese and foreign companies in the world's second-largest economy.

It will also be able to offer domestic advisory services on mergers and acquisitions -- currently conducted out of Citigroup's Hong Kong office.

Orient and Citigroup will also explore further cooperation in other areas such as research and training, the statement added.

"We are delighted to be forming this important partnership with Orient Securities, a strong, highly reputable local firm which shares Citi's management philosophy on building for success," Citi China chief executive Andrew Au said in a statement.

Citigroup, which has stakes in Guangdong Development Bank and Shanghai Pudong Development Bank, hopes the joint venture will get the regulatory green light by the end of this year and start operating in the first half of 2012.

The US giant is making a late entry into the Chinese investment banking industry. Its foreign rivals including UBS, Goldman Sachs, Morgan Stanley, Credit Suisse and Deutsche Bank already have securities joint ventures in the fast-growing market.

Citigroup has 36 branches in China and expects to have 50 by the end of the year, subject to regulatory approval.

Copyright AFP (Agence France-Presse), 2011