Bank of Beijing said it is planning to set up a fund management joint venture with Canada's Scotiabank.

The Canadian bank will take a 33 per cent stake in the Beijing-based joint venture, which will have registered capital of 300 million yuan ($43.8 million), according to a statement on the website of the Shanghai Stock Exchange.

Bank of Beijing, a city commercial bank in which the Dutch financial group ING holds a stake of about 16 per cent, is seeking, like other Chinese lenders, to diversify its income stream by branching into the insurance and securities business.

Regulators first authorised Sino-foreign fund joint ventures in 2002. They now account for half of China's 60 fund management firms.