Wednesday, January 02, 2008

Minsheng Cleared to Form Fund Venture with RBC

  
Bloomberg, Zhao Yidi, 2 January 2008

China Minsheng Banking Corp., the nation's first privately owned bank, said it has approval to set up a fund management company with the Royal Bank of Canada and Three Gorges Financial Co.

Minsheng received a notice of approval from the China Banking Regulatory Commission on Dec. 28, according to a stock exchange filing that doesn't provide details. The bank said in October 2006 that it will own 60 percent of the venture while Royal Bank of Canada, that country's biggest bank, will control 30 percent and Three Gorges will own the remaining 10 percent.

Minsheng wants to diversify its revenue and risks while the government curbs lending to prevent the economy from overheating. Setting up a fund management unit will allow Minsheng to profit from a stock market that more than doubled last year.

The venture will also help Royal Bank of Canada join Schroders Plc and Alliance AG among institutions that have set up fund units to tap China's $2.2 trillion of household savings.

China's government encourages banks to set up fund management companies to broaden their revenue sources and increase institutional investment in the nation's stock market.
;