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JPMorgan Evaluates Option to Establish Private Bank in China

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Per Bloomberg, JPMorgan Chase & Co. (JPM - Free Report) is considering the option of establishing a private bank in China and hence is conducting a feasibility study on its onshore wealth business. This move comes as the country released new regulations, wherein foreign firms are likely to get a better chance to compete with local players.

As per the new rules, foreign investors will be permitted to take a controlling stake in joint-venture securities firms in China.

Thus, the CEO of JPMorgan’s private banking business in Asia, Kam Shing Kwang stated that this move is part of the banks’ broader plans to expand in China, where the world’s second-biggest pool of wealthy people resides. However, she mentioned that the plans are at an early stage right now and no business would be set up in the distant future.

Notably, JPMorgan asked for permission to operate a majority-owned securities joint venture in China. This move comes after policymakers decided last year to treat overseas financial firms the same as local companies that lets global companies build the required infrastructure and expertise.

Most of the big international firms currently manage China money from their offices in Hong Kong and Singapore. Now, as China is permitting the opening up of private banks, the scenario might change.

JPMorgan’s CEO for China, Mark Leung said in September that the bank is looking to hire in the country across banking, asset management, custodian services and markets.

Notably, as policymakers now open up their financial sector, JPMorgan’s CEO, Jamie Dimon has sworn to bring the company’s full force to China.

Apart from JPMorgan, UBS Group AG (UBS - Free Report) and Credit Suisse Group AG , which have a domestic presence in China already, are also planning to increase operations in the market.

JPMorgan’s shares have lost more than 5% over the past year. The stock currently carries a Zacks Rank #3 (Hold).

A better-ranked stock from the finance space is Credit Acceptance Corporation (CACC - Free Report) . Its Zacks Consensus Estimate for the current year earnings has been revised 6.4% upward over the past 60 days. It currently sports a Zacks Rank #1 (Strong Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here.

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