The ice has been broken, and Western investment banks in China have become profitable


All but one of China’s global investment banks made a profit last year after Beijing allowed the owners to take full control of their local operations and increase their influence in the country’s gigantic financial sector, the newspaper writes.

Six of the seven Wall Street and European financial institutions operating in China, including JPMorgan Chase, Goldman Sachs and Morgan Stanley, made profits in 2021, according to data reported by banks and reported by the Financial Times.

As for the individual banks,

  • Morgan Stanley was the first Wall Street bank to establish an investment banking partnership (in 1995) in China. According to financial reports, in 2021, it achieved a profit of 30 million yuan, or $ 4.5 million. It made a loss of about $ 38 million in the three years before,
  • JPMorgan, which set up its first investment banking joint venture in China in 2010 but was forced to abandon it and restart in 2019, made a profit in this market of $ 11 million last year. Losses in 2019 and 2020 totaled $ 39 million,
  • however, HSBC’s Chinese partner HSBC Qianhai Securities posted a loss of $ 24 million, making a total loss of $ 89 million since 2018,
  • Goldman Sachs, which received full ownership of Gao Hua Securities’ 18-year partnership last year, made a profit of $ 12 million in 2021,
  • Swiss bank UBS was the best-performing foreign investment bank with a profit of $ 22 million.

The rise of foreign banks is likely to come to a halt this year as China’s zero-covid policy has plagued the economy and markets, and closures in China’s financial center, Shanghai, make it harder to acquire customers.

“This year is a year of slavery, not a year of revolutionary moves,” the Asian CEO of a Wall Street bank in China told the Financial Times, adding that his bank had been forced to postpone meeting its 2022 growth plans.

Cover image: Getty Images


Source: Portfolio.hu – Bank by www.portfolio.hu.

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