J.P. Morgan might sell out of its Chinese securities joint venture amid higher competition for stock and bond underwritings and sales.
The news came today in a filing by its partner First Capital Securities of Shenzhen, which holds a majority of the business, according to Chinese law.
investment bank is a smallish venture; in the first half of 2016 it earned a profit of some $7.5 million. But along with separate divisions in corporate banking and asset management, it is one of the cornerstones of the Wall Street bank’s China presence.
The news comes as the bank is reportedly close to settling a three-year investigation into its hiring of Chinese officials’ children to win business.
J.P. Morgan confirmed that it was in talks over the future of the China securities joint venture, but it denied that this signified a retreat from the country.
“China is a key market for the firm globally and for many of our clients outside China. J.P. Morgan believes in the long term prospects of China and remains fully committed to our China franchise,” the bank said in a statement to Reuters.