ICBC buys its way into US brokerage market

Industrial and Commercial Bank of China (ICBC; 601398.SH, 1398.HK) has paid US$1 for Prime Dealer Services, a US broker-dealer business owned by Fortis Securities, the Wall Street Journal reported, citing people familiar with the matter. Fortis Securities, which is controlled by BNP Paribas (BNP.Euronext), has a small US operation with just 75 existing customers, but ICBC sees it as a route into the US securities underwriting market. As a broker, Prime Dealer Services is not a deposit-taking institution, which means there are fewer regulatory restrictions on foreign ownership. The unit will be renamed ICBC Financial Services and will focus initially on clearing bond purchases, said Joseph Spillane, former chief executive of Fortis Securities who continues as CEO of the new entity. ICBC, which remains the world’s most profitable bank, last week agreed to pay about US$179 million for a 60% stake in AXA-Minmetals Insurance, a joint venture between France’s AXA (CS.Euronext) and China Minmetals Corp.