HSBC in JV talks with Industrial Securities -paper

SHANGHAI, Aug 19 - HSBC Holdings Plc, Europe's biggest bank, is in advanced talks with China's Industrial Securities Co to form an investment banking venture as early as this year, Hong Kong's Apple Daily reported on Wednesday, citing sources it did not identify.

HSBC Asia Pacific Chairman Vincent Cheng said in an interview on Aug. 4 that the British lender was in talks with potential partners in China to set up a securities venture, but did not provide details.

"We're in talks about business cooperations and we're in a sensitive period, so we cannot disclose relevant information," a senior Industrial Securities official told Reuters by telephone.

He declined to be identified because he is not authorised to speak to the media.

HSBC declined to comment.

HSBC, the biggest foreign lender in China by network, owns strategic stakes in two Chinese lenders, operates a fund venture, and in June obtained approval to launch an insurance venture in the country.

Forming a securities venture would give HSBC access to stock and bond underwriting businesses, as the London-based lender itself prepares for an intial public offering in Shanghai to benefit from China's booming capital markets.

Industrial Securities, based in China's southeastern Fujian province, is a mid-sized brokerage that plans to go public by 2010.