China Minsheng Bank Corp. has gained regulatory approval to set up a 200-million-yuan (US$29.3 million) fund management company with the Royal Bank of Canada.

RBC, Canada's biggest lender will invest 60 million yuan for a 30-percent stake in the joint venture and Minsheng will pay 120 million yuan for 60 percent, the Beijing-based bank said in a statement to the Shanghai Stock Exchange yesterday. A local company, Three Gorges Financial Co, will take the balance of the Shenzhen-based joint venture, the statement said.

Minsheng Royal Fund Management Co. will become the sixth bank-backed fund management company on China's mainland.

China's banks, insurers and fund managers were formerly banned from operating businesses in each other's market. But they are now encouraged to be all-round financial firms to compete against foreign rivals.

The Industrial and Commercial Bank of China, China Construction Bank and Bank of Communications have already allied with foreign partners to set up fund management companies in 2005.

(Shanghai Daily October 22, 2008)