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Royal Bank of Canada announces joint venture agreement
to launch Chinese Fund Management Company
TORONTO, October 30, 2006 — Royal Bank of Canada
announced today that it has entered into a joint venture agreement
with China Minsheng Banking Corp., Ltd. (China Minsheng Bank)
to launch a new Chinese joint venture fund management company,
pending regulatory and other approvals. The joint venture
company, with headquarters in Shanghai, will create, manage
and sell mutual funds in local currency to retail and institutional
investors in China.
Under the terms of the agreement, Royal Bank of Canada will
hold a 30 per cent interest in the joint venture, China Minsheng
Bank will hold a majority interest of 60 per cent, and Three
Gorges Finance Co., Ltd. will hold a ten per cent interest.
“This exciting initiative provides us with an entry
point into the rapidly expanding Chinese asset management
market,” said George Lewis, executive vice-president,
Wealth Management, RBC Financial Group and chairman and CEO
of RBC Asset Management Inc. “To be selected to participate
in this joint venture is a tremendous honour and a reflection
of RBC’s leadership in asset management and the distribution
of investment products through bank branch networks.”
RBC’s China strategy is to make targeted investments
in areas where RBC has global competitive advantages including
global debt markets, global financial institutions, private
banking and fund management.
“The fund management market in China is poised for growth,
making this an opportune time to form this joint venture,”
said Hong Qi, executive vice-president, China Minsheng Bank.
“It also serves to reinforce the growing realization
that Chinese capital markets offer good potential investment
value.”
“Each party brings their inherent expertise, knowledge
and resources to create a unique and exciting proposition,”
said Mike Chen, China country head for RBC Financial Group.
“The joint venture will benefit from the expertise in
fund management, strategic direction and management capabilities
that RBC can provide and the respected, well established presence
of China Minsheng Bank.”
China Minsheng Bank is a Chinese commercial bank headquartered
in Beijing and listed on the Shanghai Stock Exchange. It has
240 branches and banking outlets in the major cities of China.
It ranks among the top ten banks in China with widely held
ownership.
In February of 2006, RBC upgraded its representative office
in Beijing to a branch, which will enable RBC to provide a
variety of services to clients in Canada and China. In August,
the company announced the opening of RBC Life Insurance Company’s
new representative office in Beijing. Today, RBC Capital Markets
announced its mandate as co-lead manager of the institutional
tranche for the Industrial and Commercial Bank of China’s
estimated $21 billion initial public offering, the largest
in financial market history.
About RBC Asset Management Inc.
RBC Asset Management Inc. is an indirect, wholly owned subsidiary
of Royal Bank of Canada. RBC Asset Management Inc. provides
a broad range of investment services to investors through
mutual funds, pooled funds and separately managed portfolios.
With over $67 billion in assets under management and offices
in major financial centres around the world, RBC Asset Management
Inc. is one of Canada’s largest money managers. Visit
our website at www.rbcam.com.
About China Minsheng Bank
China Minsheng Bank was established in 1996. It is the first
major national commercial bank in China without state ownership.
As at December 31, 2005, China Minsheng Bank had total assets
of RMB 557.1 billion (CAD 78 billion) and an industry-leading
non-performing loan ratio of 1.28 per cent China Minsheng
Bank has 240 banking outlets and branches in cities across
China, and has established agent bank relationships with nearly
750 banks in 78 countries and regions. In 2005, as published
by UK’s The Banker magazine, China Minsheng Bank was
ranked the second most competitive commercial bank in China
and 28th in the top 200 Asian banks by total assets.
Three Gorges Finance Co., Ltd.
Three Gorges Finance Co., Ltd is a non-bank financial institution
authorized by the People's Bank of China and established in
1997, serving the Three Gorges Project and member companies
of the China Three Gorges Project Corporation. As at the end
of 2005, Three Gorges Finance had total assets of RMB 8 billion
(CAD 1.1 billion).
Safe Harbor Regarding Forward-Looking
Statements
Certain statements contained in this press release may be
deemed to be forward-looking statements under certain securities
laws, including the “safe harbour” provisions of
the United States Private Securities Litigation Reform Act
of 1995 and in any applicable Canadian securities legislation,
and Royal Bank of Canada (RBC) intends that such forward-looking
statements be subject to the safe-harbour created thereby.
The words "may," "could," "should,"
"would," "suspect," "outlook,"
"believe," "plan," "strategy",
"anticipate," "estimate," "expect,"
"intend," "forecast", "objective"
and words and expressions of similar import are intended to
identify forward-looking statements.
By their very nature, forward-looking statements involve
numerous factors and assumptions, and are subject to inherent
risks and uncertainties, both general and specific, and risks
exist that predictions, forecasts, projections and other forward-looking
statements, including statements about the proposed joint
venture will not be achieved. We caution readers not to place
undue reliance on these statements as a number of important
factors could cause our actual results to differ materially
from the beliefs, plans, objectives, expectations, anticipations,
estimates and intentions expressed in such forward-looking
statements. These factors include, but are not limited to
the possibility that the proposed joint venture does not close
when expected or at all because required regulatory or other
approvals are not received or other conditions to the closing
are not satisfied on a timely basis or at all, the terms and
conditions of the joint venture may need to be modified to
achieve regulatory approval, or that the anticipated benefits
of the joint venture are not realized as a result of such
things as the strength of the economy and competitive factors
in the areas where the joint venture will do business; the
impact of changes in the laws and regulations regulating financial
services and enforcement thereof; judicial judgments and legal
proceedings; reputational risks, and other factors that may
affect future results of RBC including changes in trade policies,
timely development and introduction of new products and services,
changes in tax laws, and technological changes. We caution
that the foregoing list of important factors is not exhaustive.
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Media contact:
Beja Rodeck, media relations, 416-974-5506, beja.rodeck@rbc.com
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