The China Banking and Insurance Regulatory Commission (CBIRC) has granted initial approval to allow BNP and AgBank, China's third-biggest lender by assets, to form a new joint venture, according to an AgBank stock exchange filing late on Monday.
BNP confirmed the initial approval, which is in the form of the CBIRC formally accepting the two companies' application for a final licence to open for business in the market.
The French firm will own a 51% stake in the venture, while state-owned AgBank will have the rest.
Reuters reported in September last year that BNP's asset management arm was in talks to form a wealth management venture with a unit of AgBank, taking advantage of China's opening up of its financial markets for foreigners.
BNP Paribas Asset Management and ABC Wealth Management, a wealth arm of AgBank, will fund the new platform, according to Monday's filing.
Since China deregulated financial markets in 2019, allowing foreign asset managers to set up majority-owned ventures with local banks, a flurry of foreign firms including BlackRock and Amundi have launched majority-controlled units locally.
Other foreign firms such as Barclays and Allianz are also exploring this and trying to find local partners.
The new platform will add to BNP Paribas' 49%-owned asset management joint venture with brokerage firm Haitong Securities which mainly runs mutual funds. The French lender also owns 16.3% shares of China's Nanjing Bank.
(Reporting by Selena Li; Editing by Sumeet Chatterjee and Mark Potter)
By Selena Li