Image: Reuters Berita 24 English - According to two people with knowledge of the situation, Barclays is looking for a Chinese banking partne...
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| Image: Reuters |
Berita 24 English - According to two people with knowledge of the situation, Barclays is looking for a Chinese banking partner to establish an asset management joint venture there as part of British lender's plans to increase its presence in the second-largest economy in the world.
According to the sources, Barclays would establish a majority-owned China asset management company through its division Barclays Investment Managers (BIM), which is already active in Europe and Japan.
If successful, Barclays will join a long list of other Western financial institutions that have already begun operating in China's lucrative $4.3 trillion asset management sector, which is dominated by banks.
The Barclays China development plan coincides with the bank's gradual expansion in Asia, which reverses a pullback from the region six years ago when it sold its Singapore and Hong Kong wealth management businesses and departed its cash equities operation.
According to a third source, the bank with its London headquarters recently employed Cherry Zhu in Shanghai to expand BIM's operations in China.
According to her LinkedIn profile, Zhu was previously the Singapore-based sales director at Northern Trust Asset Management. She did not immediately respond to a request for comment.
Due to their lack of authorization to speak to the media, the sources could not be identified.
Barclays said it has been expanding its presence in China but declined to respond directly to Reuters' question on its proposed joint venture for China asset management.
A bank spokeswoman stated in a statement, "The bank has been building our cross-border corporate and investment bank infrastructure in China, growing in a progressive and measured fashion."
2019 saw China let international businesses to establish majority-owned joint ventures (JVs) with the wealth divisions of local banks, allowing Western businesses wider access to the country's enormous financial sector.
Earlier this month and in May 2021, respectively, Goldman Sachs and BlackRock started operating China asset management joint ventures they had set up with the Industrial and Commercial Bank of China and the China Construction Bank.
Since becoming the first foreign-controlled JV to begin operations there in September 2020, Amundi, the largest asset manager in Europe, has attracted more than $11 billion in assets from Chinese investors.
EXPANSION TO ASIA
According to Morningstar data, Barclays had $9.9 billion in retail fund assets as of the end of June spread over more than 110 funds managed by its wealth and investment management departments.
However, according to the firm website, institutional investors are the primary target market for BIM's goods.
The China plans come as Barclays, the third-largest bank in Britain in terms of market value, expands the rebuilding of its footprint in Asia.
Barclays almost quadrupled its shareholding in Barrenjoey Capital Partners in May to support the growth of the Australian boutique investment bank's operations.
According to business registration records, the lender increased the operational capital it provided to its Shanghai banking office by $75 million in January of this year and then by $105 million.
According to the second source, the bank is also bolstering its corporate and investment banking operations in China as it wagers on a rising demand from Chinese clients for access to international capital markets and cross-border consulting services.
In addition to its aspirations to expand its markets and cross-border advising services, Barclays declined to comment on the capital injection in Shanghai.
China and the Middle East are two foreign regions where Barclays intends to increase the footprint of its corporate and investment banking division, according to its most recent annual report.
