China scraps foreign ownership limits on banks

Foreign stakes were previously capped by up to 25%.

Bloomberg reports that China has removed the 20% foreign ownership limits for a single institution and 25% for a group of overseas investors in domestic banks and asset management companies as a testament to the country’s dedicated efforts to open up its $40t financial services sector.

Overseas financial institutions will now be treated in the same way as local companies, according to a statement by the China Banking and Insurance Regulatory Commission (CBRC).

Foreign players are already lining up for a slice of the country’s banking pie with Nomura and JPMorgan Chase & Co. setting up joint ventures in China.

The CBRC earlier approved the application of Arab Bank, CTBC Bank, Chang Hwa Bank and Cathay United Bank to open for business in China following an announcement from China‘s Vice Finance Minister Zhu Guangyao in November 2017 removing caps on foreign ownership in Chinese financial institutions.

“Our expectation is that foreign banks can look forward to a smoother road to investing into China’s financial sector following the promulgation of this Decision and further implementation rules,” accounting firm EY said in an earlier report.

Here’s more from Bloomberg: