INVESTMENT bank China International Capital Corp. (CICC) and brokerage China Investment Securities Co., firms with 186 billion yuan (US$28 billion) of assets last year, are in talks on a possible merger, people familiar with the matter said.

    A transaction is not certain, and the structure of any deal is yet to be decided, the people said, asking not to be identified because the talks are private.

    Investors may be betting that a merger would help CICC’s efforts to reinvent itself under chief executive officer Bi Mingjian after slipping from top Chinese brokerage by revenue in 2005 to No. 23 a decade later.

    Linking up could be “a good deal for CICC,” said Lucas Wang, a Hong Kong-based analyst at First Shanghai Securities Ltd. “CICC’s strength has been with high net worth individuals and corporate clients; the network and mass-market client base of China Investment Securities will be a good fit.”

    CICC’s shares closed up 1.5 percent.

    Set up in 1995, Beijing-based CICC was part-owned by Morgan Stanley until that firm sold out in 2010. Run by Levin Zhu, the son of then-Premier Zhu Rongji, it brought some of the country’s biggest state-owned firms to market, becoming known as China’s answer to Goldman Sachs Group Inc.

    As part of CICC’s efforts to drive a revival, it raised US$811 million from an initial public offering in Hong Kong in November, earmarking money for expansions in equity sales and trading, wealth management and international business. During last year, surging income from brokerage commissions and asset management helped to drive up profit.

    The company that CICC may combine with, Shenzhen-based China Investment Securities, sat at No. 17 in the revenue rankings for last year, where CITIC Securities Co. was No. 1, according to Securities Association of China data.(SD-Agencies)