The brokerage arm of Japan’s Sumitomo Mitsui Financial Group Inc (8316.T) is planning to start a wholly-owned firm in China, its chief executive said, as the country sets out to open up its vast financial sector in 2020 Trend reports citing Reuters.
The unit, SMBC Nikko Securities, did not say when it will start operations in the world’s second largest economy. But its CEO Yoshihiko Shimizu was in Beijing late last month to receive an approval to set up a representative office, he said in an interview to Reuters on Dec.10, which was embargoed for release on Tuesday.
The decision comes close on the heels of rival and Japan’s biggest brokerage Nomura Holdings (8604.T) getting the regulatory approval to launch its majority-owned joint venture.
Nikko, however, has decided to avoid partnerships in China.
“Speaking about capital, we want to go by ourselves, not a joint venture,” said Shimizu, who before joining Nikko used to manage Chinese business for Sumitomo Mitsui Banking Corporation.
“We can do business based on our own decision if we go it alone... I don’t think joint venture is a good option for us.”
Meanwhile, Nomura is looking to make its new joint venture a fully owned unit eventually, its chairman Nobuyuki Koga was quoted as saying by Japan’s news agency Jiji Press in October.
As China unveiled a plan in July to scrap financial sector ownership limits in 2020, a year earlier than scheduled, to show the world it will keep opening up its markets, foreign banks are looking to raise their bets.
U.S. investment bank Morgan Stanley (MS.N) is moving closer here to taking a controlling stake in its Chinese securities joint venture, while Citigroup (C.N) is planning to set up a wholly-owned unit in China after exiting a minority-owned joint venture by the end of the year.
Last year, UBS (UBSG.S) became the first foreign bank to get Chinese regulatory approval to take control of its securities business by raising its holding to 51%.
As Nikko sets its eyes on the Chinese market, Shimizu said the firm aims to nearly double its recurring profit from overseas business over the next three years to about 20 billion yen ($184 million). The profit came in at 11.1 billion yen in the year ended in March.