BNP Paribas has hired close to 30 people to launch its securities operation in China, re-entering the market after exiting a local joint venture 17 years ago, sources familiar with the matter said.

The French bank will initially focus on building out its brokerage, research and asset management units after receiving regulatory approval last week. The firm has opted not to expand its onshore investment-banking business due to the excessive costs and a dismal outlook for deals, the sources said, asking not to be identified as discussing private matters.

A Hong Kong-based spokesperson declined to comment.

The Paris-based lender is leveraging its European status to slowly expand in China even as some Wall Street firms scale back amid growing US-China tensions. In the past two years, Morgan Stanley, Goldman Sachs Group and JPMorgan Chase & Co have all made rounds of job cuts in Hong Kong and China, mostly in their investment-banking businesses as stock underwriting fees dwindle.

BNP, led by Asia chief executive officer Paul Yang since 2020, has instead focused on corporate banking in China, broadening the mix of revenue from financing, transaction banking, cash management and fixed-income sales.

Still, the bank has not entirely abandoned investment banking in China and other parts of Asia. The firm hired Ren Wang, a 20-year industry veteran, in late 2021 to revamp its business. The former Asia president at Jefferies Financial Group and UBS Group banker has recruited more than 20 dealmakers, seeking to win business for stock sales and China cross-border mergers.

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BNP took a bigger slice of the market last year, as its ranking for mergers and acquisitions vaulted to eighth, from 33rd in 2022, data compiled by Bloomberg show. The biggest deals included Zhejiang Geely Holding Group’s eight billion euros (S$11.6 billion) venture with France’s Renault in July. The bank also advised on the US$3.4 billion buyout of Vinda International Holdings in December, along with the US$1.7 billion sale of Hollysys Automation Technologies to Ascendent Capital Partners.

Goldman Sachs and JPMorgan also own full control of their securities platform. Morgan Stanley, which currently has 94 per cent in its venture, is opting not to build an onshore brokerage but will focus on building its research, principal trading and futures business on the mainland. UBS was earlier in discussion to boost its holding to 100 per cent of the business, sources familiar have said. BLOOMBERG