Citigroup is nearing an agreement with China-based Orient Securities Company to set up a joint-venture securities business that would give the bank a foothold in China's domestic capital markets.
"Citigroup is close to an agreement with a partner in China to set up a joint-venture securities business," The Wall Street Journal reported citing a source.
The banking entity is expected to sign a memorandum of understanding (MOU) with Orient Securities as early as Thursday, the report said.
The deal would still need regulatory approval, it added.
In accordance with Chinese rules on foreign investment in the securities industry, the venture would be able to engage in equity and bond underwriting as well as Merger and Acquisition advisory services, though it would not be able to trade in the secondary market, the daily noted.
The partners would also cooperate on research and training, it added.
Citi would join a long list of banks that have set up such ventures in China. This includes UBS AG, Goldman Sachs Group Inc, JP Morgan Chase & Co, Credit Suisse Group AG and Deutsche Bank AG.
According to the publication, a deal in China would be a step towards its efforts to expand business in emerging markets, and would also help it compete against increasingly assertive Chinese banks.
Orient Securities, established in 1998, operates 57 branches and comes under the Shanghai Government.