Swiss investment bank raises securities JV stake

Written by Denis Suslov || 02 Jul 2015

UBS reported that it had purchased an additional 4.99% stake in its Mainland securities business from the International Finance Corporation, increasing its stake to 25% from 20%. The raised stake is a positive sign showing global investment banks are confident in China's capital markets.

Brokerage JVs have long been limited to certain areas of capital market activities in China and had a rather small market share in the market, however with the return of IPOs, bull market and opening borders we might see a return of foreign players to China.

Interestingly, the bank still has a room to enlarge its stake, as the CSRC raised the highest allowed level to 49% in 2012. Nevertheless, the banking group has a wide business presence in China. In addition to its securities joint venture, UBS holds 49% in the UBS SDIC fund management company, which offers funds products to domestic clients, including offshore investment thanks to a USD 1.8 billion Qualified Domestic Institutional Investor (QDII) quota. Speaking of cross-border investment management, the group holds USD 1.74 billion of Qualified Foreign Institutional Investor (QFII) quota, and RMB 5.3 billion of Renminbi QFII quota. Also, the bank bought 95.42% of Shanghai Pumin Futures Brokerage for USD 14.84 million in 2014.

Through an ongoing commitment to the market and willingness to explore all available options, the bank has positioned itself to be ready for the new opportunities in China’s finance.

UBS in China

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