JPMorgan to buy a 20% stake in its Chinese securities joint venture that has been put up for sale by one of its local partners for 177.7 million yuan ($26.02 million). The potential transaction could take the U.S. bank’s stake from 51% to 71% as it edges closer to full ownership of a securities entity in China at a time when geopolitical relations between the United States and China remain fragile.
JPMorgan was the only candidate that could raise its ownership with priority rights in the securities joint venture, the filing showed, as the remaining four shareholders had given up their rights to purchase the 20% stake. The securities joint venture consists of investment banking, research, equities and fixed income businesses. JPMorgan’s development came after Citigroup received regulatory approval on Wednesday to take full ownership of a custodian business in mainland China. China has overhauled regulations to grant foreign firms greater access to its financial sector which is worth trillions of dollars.