TORONTO--Bank of Nova Scotia (>> The Bank of Nova Scotia) said Friday that it received regulatory approval from China to launch a fund management company, almost five years after it formed a joint venture partnership with the Bank of Beijing.
Scotiabank, Canada's fourth-largest bank by assets, holds a 33% stake in the company, known as Bank of Beijing Scotiabank Asset Management Co., while the Bank of Beijing has a 62% interest. The remaining 5% is held by Beijing-based General Research Institute for Nonferrous Metals.
The fund management license was the first to be awarded under a new round of pilot programs allowing commercial banks to set up fund-management companies, Scotiabank said.
The approval is key for Scotiabank, which is counting on its international business to offset slowing consumer lending growth in its home market. The bank has made more than 50 acquisitions since the global financial crisis, mostly in fast-growing Latin American and Asian markets.
Scotiabank inked its joint venture deal with Bank of Beijing in August 2008. The bank also owns a 19% interest in Bank of Xi'an, and agreed to buy a near-20% stake in China's Bank of Guangzhou in 2011. It is still waiting for regulatory approval to complete that transaction.
Foreign banks and insurance companies are keen to build wealth management businesses in China, the world's most populous country, to tap into the emerging middle class. Total assets under management in China's wealth management industry stood at $450 billion last year, said Scotiabank.
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