Julius Baer considering JV in China to boost Asia growth: Report
Julius Baer will likely take a decision on its Chinese partner in 2021, before starting the formal license application process
October 30, 2020 / 01:31 PM IST
Julius Baer Gruppe AG is looking to set up business in China in partnership with a local financial firm to tap into the world’s second largest economy and boost growth in Asia, sources told Reuters.
The Swiss entity has started looking for partners for its majority-owned joint venture (JV) in the country and if successful, would become the first big private bank to set up onshore wealth management facilities in China.
Julius Baer will likely take a decision on its Chinese partner in 2021, before starting the formal license application process, the sources added.
Moneycontrol could not independently verify the report.
A spokesman for Julius Baer in Zurich declined to comment on the matter.
However, the development is in line with CEO Philipp Rickenbacher’s statement in September when he said: “Mainland China of course is always the big prize. But we’ve seen that, by being present locally, many firms have lost a lot of money in recent years ... Is it impossible? No, and we’re working intensely on continuously exploring these possibilities.”
China only recently opened up its financial sector to bigger foreign participation. But its wealth management industry is the fastest growing in the world, it has been marred by high-risk, illiquid products and lax regulatory enforcements. This made Hong Kong, Singapore and Zurich the preferred route for global firms, the report noted.
Officials have over the past year cracked crack down on dubious practices, broader push to reduce debt and limit the sale of risky products has made JV by foreign entities easier.
Switzerland’s third largest listed private bank, Julius Baer is also considering “re-establishing presence” in the US to aid Latin American business. The banks has looked to emerging markets to “build-out of some of its European operations to bring in fresh assets,” the report said.