BofA to apply to set up brokerage unit in China

Bloomberg

Bank of America Corp (BofA) is planning to apply to set up a securities firm in China, playing catchup to rivals including JPMorgan Chase & Co and Goldman Sachs Group Inc. in an expansion into the $54 trillion financial market.
The bank aims to apply for regulatory approval early next year. It plans to submit applications for licenses allowing it to trade and underwrite stocks and bonds as well as hedge risk, one of the people said. The timing is subject to change.
The Charlotte, North Carolina-based bank is a latecomer after China last year allowed global banks to operate fully controlled ventures with firms such as Goldman and JPMorgan already gaining approval. Lenders are investing heavily in both operations and adding staff, expanding their footprint in everything from investment banking to asset management.
With billions of dollars in potential profits to chase, global banks have so far been undeterred by the rising political tension and a broad crackdown by Beijing on its private sector that has roiled markets.
Bank of America had so far been the only major US bank to decide against pursuing a securities venture in China.
, but it has large exposure to other banking areas in the world’s second largest economy. The lender has also been building out its investment banking in the broader Asia Pacific region, catching up to its main rival, JPMorgan.
Citigroup Inc is also planning to set up new investment banking and trading operations in China. Morgan Stanley set up its own China securities venture in January 2011 and is now moving closer to taking full control after announcing plans to boost its stake in May.