HONG KONG: Goldman Sachs Group Inc has signed a pact with its China joint venture partner to wholly own the business, becoming the latest foreign bank to take advantage of the opening up of the financial sector in the world's second-largest economy.
The process to boost its stake in the Goldman Sachs Gao Hua (GSGH) venture from 51% to 100% has also been initiated with the local regulators, according to an internal memo issued on Tuesday to staff of the Wall Street bank.
A spokesman for Goldman Sachs in Hong Kong confirmed the memo content.
Goldman in 2004 set up its China securities JV with Beijing Gao Hua Securities, which was co-founded by veteran Chinese banker Fang Fenglei.
Unlike most of the other China JVs, Goldman had day-to-day operational control of its business, which offers investment banking services such as equities and bond underwriting and deal advice, even with its minority ownership.
In March this year, the bank received the final regulatory approval to raise its stake in the joint venture from 33% to 51%.
Full ownership could allow foreign banks to expand their operations in the multi-trillion-dollar Chinese financial sector, and better integrate them with their global businesses.
"One hundred percent ownership of our franchise on the mainland represents a significant commitment to and investment in China, outlined in our China strategic plan," said the Goldman memo.
"This focuses on growing and strengthening our existing China businesses, expanding our addressable market and investing in talent and technology." - Reuters