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JP Morgan Injects $395 Million into China Banking Subsidiary (JPM)

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JP MORGANBanking giant JP Morgan Chase & Co. (NYSE: JPM) today said that it has injected an additional $395 million in its China banking subsidiary. With the fresh capital injection, JP Morgan joins other foreign banks that have expanded their presence in China, the world’s fastest growing major economy.

Zili Shao, Chairman and CEO of JP Morgan China, said that the additional capital will better position the bank in the evolving regulatory environment and cement its commitment to clients in China. Shao said that the capital will be used to expand the bank’s branch network, develop products, boost corporate lending and recruit employees.


Although China is an attractive market for foreign banks, most of them have struggled to gain traction. Currently, foreign banks account for only 2% of total assets in China’s banking system. Despite having a small share, foreign banks are still subject to the same rigorous regulator requirements as Chinese banks. This includes limit on outstanding loans to less than 75% of the deposits they hold.

Despite the tough regulatory environment and a small share, foreign banks such as JP Morgan still see the Chinese market as attractive. The latest capital injection from JP Morgan is in fact its second in three years.

The capital injection from JP Morgan comes a few weeks after ANZ Group announced an additional investment of $317 million in its China operations.

JP Morgan, meanwhile, has also received approval from China’s banking regulator to open a new branch in Suzhou.

 








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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