Citic Securities, China’s largest brokerage and France’s Credit Agricole SA are in exclusive talks to combine their global equity brokerage units and investment-banking operations in Asia.Citic Securities International Co., based in Hong Kong, had assets of 5.17 billion yuan at the end of last year. Profit at the division more than tripled in 2009, to 181.3 million yuan, according to Citic Securities’ annual report.

The firms have signed a memorandum of understanding, they said in an e-mailed statement yesterday. As a first step, CLSA Asia-Pacific Markets, 65 per cent owned by Paris-based Credit Agricole, would form a Chinese joint venture in investment banking and institutional broking with Citic Securities.

Teaming up with Citic Securities, which has ranked first or second in China since 2006 in underwriting stock sales, will help CLSA leapfrog rivals including Goldman Sachs Group Inc. in the world’s fastest-growing major economy. Partnering with CLSA, rated Asia’s best brokerage in Asiamoney’s 2009 survey of institutional investors, may boost Citic Securities’ expansion outside China.

“The two firms have a common ambition and vision to create a leading China and Asia-Pacific focused broker and investment bank in order to capture growing capital market opportunities,” the banks said in the statement. The firms expect the Asia combination “to provide a solid foundation for the build out of a unique and powerful global equity business platform,” they said.

Credit Agricole rose 24 US cents, or 2.2 per cent, to 11.06 euros in Paris trading, paring the decline this year to 11 per cent. The bank has a market value of 25.6 billion euros ($US33.8 billion).

The accord needs regulatory approval, the statement said.

China and ‘Beyond’

CLSA, founded in 1986, has more than 1,350 workers and focuses on equity and economic research, trading and asset management. It also advises on stock sales and mergers. CLSA expanded its US operations and opened a business in Australia since early 2009. Management holds 35 per cent of the brokerage.

The firm’s venture with Fortune Securities won regulatory approval in June 2008 to trade shares in China, whose stock market is the world’s third-largest by capitalisation, according to Bloomberg data.

Citic Securities’ planned $US1 billion cross-investment with Bear Stearns Cos. fell apart in March 2008 as the Wall Street firm teetered on the brink of collapse and was forced to sell itself to JPMorgan Chase & Co.

Citic Securities’ brokerage was 14th last year in trading shares and mutual funds in the country, according to the Securities Association of China. The ranking excludes its 60 per cent stake in China Securities Co., which Citic has been ordered by the securities regulator to sell.

“We are eager to extend our equity market services, offering our clients with enhanced distribution network, financing, research and advisory capabilities beyond China,” said Boming Cheng, the president of Citic Securities, in the statement.

Posted by Shayne Heffernan on May 4th, 2010and filed underEquities, Europe, Latest News, News & Events.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site