China commercial lenders expand investment banking operations


A pedestrian walks past the entrance of a Industrial and Commercial Bank of China Ltd. (ICBC) branch in the Gongbei district of Zhuhai, Guangdong province, China, on Sunday, Nov. 16, 2014. Investors piled into Shanghai shares on the first day of exchange-link trading, buying the maximum amount allowed in a sign of global demand for mainland equities as China opens up its $4.2 trillion market. Photographer: Brent Lewin/BloombergDo not tell Jamie Dimon — who warned he “wouldn’t want to see the next JPMorgan Chase be a Chinese company” — but universal banking is gaining traction among mainland Chinese lenders.

The universal banking model, under pressure and deemed to be broken in much of the world, is finding favour in China as traditional lending businesses slow.

Last month, three of China’s four largest banks reported annual declines in fourth-quarter earnings for the first time since 2009. As elsewhere, clouds are gathering: in addition to tougher capital requirementsChinese lenders have to deal with interest-rate deregulation and rising bad loans on the back of an economic slowdown.

That is driving banks to look elsewhere for income, says Zeng Gang, director of bank research at the Chinese Academy of Social Sciences’ Institute of Finance and Banking…

China commercial lenders expand investment banking operations

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