UBS signs deal with China’s ICBC

Hong Kong — Swiss banking group UBS said on Tuesday it signed a memorandum of understanding with the world’s largest lender by assets, Industrial and Commercial Bank of China (ICBC), to explore collaborations in China and overseas markets.

UBS has long been keen to grow its footprint in China that already includes a mutual fund joint venture and a private fund business, but earlier in 2023 it appeared to scale back expansion plans due to headwinds to China’s economic recovery and geopolitical tensions.

The banks will explore co-operation in asset management, wealth management, and investment and corporate banking, according to a UBS statement.

The deal includes product development and distribution, client coverage, global market trading, investment and financing, research, asset custody and exchange of expertise.

UBS completed an acquisition of its smaller crosstown rival Credit Suisse in June, through which it now holds a 20% stake in ICBC Credit Suisse Asset Management Company, a fund joint venture previously partially owned by Credit Suisse.

Looming uncertainty about doing business in China has dampened the appetite of western business. An exit ban imposed on a senior executive of Japanese bank Nomura added to the perceived risks.

Earlier in 2023  UBS announced it shelved plans to set up a new fund unit in China and decided to maintain ownership in the ICBC fund joint venture.

In the months since taking over its former rival, UBS also scrapped plans for Credit Suisse to set up a locally incorporated bank in China.

UBS has also made significant job cuts in the region, letting go of the majority of Hong Kong-based investment banking staff and the securities research unit at Credit Suisse.

Reuters