Goldman gets nod for full ownership of China securities firm

Hong Kong

GOLDMAN Sachs Group won approval to take 100 per cent ownership of its securities joint venture in China, a key step to expanding in the country even as growing political tension and a Beijing-led crackdown on the private sector has ratcheted up risks.

The move gives the firm free rein to pursue a clearer growth strategy that includes doubling its workforce in China to 600 and ramping up in asset and wealth management. The US bank has already added 116 staff onshore this year, boosting the total to more than 400, a spokesman said.

Global banks are pushing to gain a bigger foothold as China's market opens, jostling to capture a share of billions of dollars in potential profits. The approval from the China Securities Regulatory Commission means the end of the 17-year joint venture with Chinese banker Fang Fenglei, who set up Gao Hua Securities with a loan from Goldman in 2004.

This "marks the start of a new chapter" for the China business and "will enable us to position our firm for long-term growth and success in this market under one wholly-owned entity," the bank's top executives David Solomon, John Waldron and Stephen Scherr said in an internal memo.

Goldman is the second Wall Street firm to be granted full ownership of its onshore securities operations. The approval came about 10 months after it signed an agreement with its partner to take full control. It took the firm 7 months to win a nod in March 2020 to boost its stake in the venture to 51 per cent from 33 per cent.

Goldman had been competing to become the inaugural Wall Street bank with full control onshore with JPMorgan Chase, which received its approval two months ago.

With China's go-ahead, the bank now owns all its operations across the Asia-Pacific. BLOOMBERG