Bank of Montreal, which announced last week that it has purchased the North American operations of online broker CSFBdirect, is currently vying against six other companies for a license to sell mutual funds in China.
Bank of Montreal hopes to strike a joint venture with a Beijing securities firm called Fullgoal. Chinas entry to the World Trade Organization opens the door to such joint ventures, but the Chinese government is limiting the number of foreign companies that can strike joint ventures with Chinese firms in the newly liberalized market.
Ian Blair, a Bank of Montreal spokesman, said the firm will likely find out whether the joint venture will come to fruition in the next few months. The bank currently has three locations in China, including branches in Hong Kong and Shanghai.
Should China allow for the joint venture with Fullgoal, the plan would be to develop domestic Chinese mutual funds and, perhaps, sell those products in the U.S. as well, Blair said.
"China is an amazing market," he said. "The target core would be about a third of the population. The Chinese are amazing savers; they save about 40% of their salary a year and it goes into savings accounts."
Bank of Montreals other recent acquisitions include six U.S. banks and wealth-management shops in the past two years, as well as Guardian Group of Funds in Canada.