(RBS) Royal Bank of Scotland Group Boosts Chinese Investment

Royal Bank of Scotland Group Plc. (RBS) has boosted its investment banking business in China by appointing two senior investment bankers to its team.

RBS appointed Wei Wang as head of China financial institutions group and Qing Zhu as head of China energy and resources. Wang previously served in Citigroup Inc. (C) as head of the public sector group at Citibank China. Zhu came from JPMorgan Chase & Co. (JPM) in which he was a banker on China’s natural resources and real estate deals.

The hiring follows the joint venture (JV), Huaying Securities Co. Ltd. that RBS and Guolian Securities Co. Ltd. launched last month. Huaying Securities is the first securities JV in China involving a U.K. domiciled bank and the first securities JV launched in China this year.

China’s increasing investment banking market is lucrative for foreign companies. In fact, a number of U.S. and U.K. banks are making efforts to set up JVs in that country. Launching a JV in China and strengthening its team sure looks like a strategic fit for RBS given its keenness to explore the country’s thriving economy and booming capital market.

Besides RBS, earlier this month, Citi also entered into an agreement with China’s Orient Securities Co to set up of an investment banking venture.  Morgan Stanley (MS) also announced the launch of its JV with the Chinese securities firm China Fortune Securities Co., better known as Huaxin Securities Co. The new entity will be known as Morgan Stanley Huaxin Securities.

China was the world’s largest IPO market in 2010. Around 346 companies raised $83.7 billion through initial public offerings in the domestic A-share market. In terms of capital raised, this represented a whopping 160% increase from the prior year. Moreover, the overall debt capital market in China reached $875.6 billion, ranking it the third biggest globally.

We believe that setting up of JVs in the China territory would provide significant opportunities for these companies to augment their top line and cash in on the prospects of an untapped capital market.

CITIGROUP INC (C): Free Stock Analysis Report

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ROYAL BK SC-ADR (RBS): Free Stock Analysis Report

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