News — ChangeLab

Credit Agricole is expanding its presence in China through M&A. Will it serve the development of investment banking services?

Earlier this year, some European banks, such as Credit Agricole, Standard Chartered (STAN.L) and J.P. Morgan (MS.N), were able to successfully expand their investment banking operations in China.

France's second-largest bank, Credit Agricole opened a new unit, Credit Agricole Advisory Services, in Beijing in early March to focus on cross-border mergers and acquisitions (M&A) transactions, including buying, selling and raising foreign capital. This decision was made to increase investment banking operations in China, as well as to attract new local and international clients to its investment opportunities. Representatives of the bank note that previously the bank conducted operations for Chinese clients from its offshore base in Hong Kong.

The similar example of Credit Agricole's expansion into China has also been followed by some major international banks. For example, Standard Chartered was licensed to set up a new securities brokerage unit, and J.P. Morgan and Morgan Stanley have gained full ownership of their fund units in China.

Thus, we are seeing growing interest from foreign financial institutions in investing in the Chinese banking sector. This trend is due to the liberalisation of the financial sector, encouragement of foreign investment, etc. For example, according to the People's Bank of China 2022 report, the total assets of foreign banks in the country amounted to nearly $519 billion, representing 1.31% of the total assets of commercial banks across China. In addition, the Chinese government recently announced a decision to allow foreign banks to own up to 10% of its banks. This proves that China is increasingly integrated into the global economy and that this dynamic market is more open.