HSBC Holdings Lifts Stake in China Securities Venture

HSBC Holdings PLC has increased its stake in the joint venture of Chinese Securities from 51% to 90%. This is the latest in a series of moves by global banks to strengthen their involvement in investment banking operations in mainland China.

The increased holding will give the British banking giant a bigger share in the financial performance of the HSBC holdings, which underwrites securities offerings, publishes research, advises on mergers and helps clients trade domestic stocks and bonds.

The London based company has said that it bought the 39% stake in HSBC Qianhai Securities Ltd. from its partner, state-owned Qianhai Financial Holdings Co. The latter has retained a 10% stake in the business.

HSBC has been focusing more on Asia in recent years. The company also said that it would invest $6 billion into the region over five years. China is an integral part of that shift, along with a plan to hire 3,000 wealth planners.

HSBC Qianhai Securities started operating in late 2017 and was the first majority foreign securities joint venture in China. At the time, HSBC was able to take advantage of an economic partnership deal with Hong Kong and China to get ahead of international rivals in securing that approval.

According to the most recent annual report on HSBC Qianhai Securities’ website, the unit made a loss of 136 million yuan in 2020 on an operating income of 260 million yuan. According to the World Federation of Exchanges, Shanghai and Shenzhen listed stocks were worth some $13.7 trillion as of February.