Scotiabank and the Bank of Beijing have finalised terms for the Canadian bank to acquire a 33% stake, valued at $15 million, in a fund management joint venture that is yet to be established.

The joint venture, which is subject to regulatory approval in China, will be named Bank of Beijing Scotiabank Asset Management. The JV will design and market a variety of mutual funds to retail and institutional customers of Bank of Beijing.

"Scotiabank has long recognised the opportunities that are present in China," says Michele Kwok, Scotiabank's senior vice-president for Asia-Pacific and the Middle East.

It was just a matter of finding the right partner. Through this joint venture with the Bank of Beijing, Scotiabank will be reaching out to more than 8.2 million of the mainland bankÆs customers with co-branded mutual fund products, says Kwok.

Scotiabank has high hopes for the fund management JV in China, and for further growth in Asia-Pacific.

With more than 138 million investor accounts and more than $380 billion in assets under management, the Chinese asset management market has had a compounded annual growth rate of over 230% over the past three years ending December 31, 2007, according to Scotiabank.

"Scotiabank is committed to growing our international wealth management platform,ö says Dan Wright, senior vice-president for international wealth management at Scotiabank.

Scotiabank operates in 11 countries in Asia-Pacific. It has been in China since the bank opened a Beijing representative office in 1982. It has branches in Shanghai, Guangzhou and Chongqing in China as well as offices in Hong Kong and Taipei. It also owns 24.9% of Thanachart Bank, a major automobile financier and retail bank in Thailand.

Bank of Beijing, meanwhile, was established in 1996 from the consolidation of 90 urban credit cooperatives. It has more than 131 offices in Beijing and branches in Tianjin, Shanghai and Xi'an.