ICBC And UBS Explore Banking And Wealth Management Collaboration

(CTN News) – It was announced on Tuesday that Swiss banking group UBS has signed a memorandum of understanding (MoU) with China’s largest lender by assets, Industrial and Commercial Bank of China (ICBC), to explore the possibility of collaborations in the Chinese and international markets.

The Swiss bank UBS has long been keen to expand its footprint in China, which already includes a mutual fund joint venture and a private fund business, but earlier this year it appeared to scale back its expansion plans due to headwinds on the Chinese economy as well as geopolitical tensions in the country.

There will be an exploration of cooperation between the two banks in the areas of asset management, wealth management, and investment and corporate banking, according to UBS.

In addition to the product development and distribution, the deal includes client coverage, global market trading, investment and financing, research, asset custody, and knowledge exchange.

The Swiss bank UBS announced in June that it had acquired its smaller cross-town rival Credit Suisse, through which it now holds a 20% stake in the joint venture ICBC Credit Suisse Asset Management Company, formerly partly owned by Credit Suisse.

The insecurities surrounding doing business in China have dampened Western businesses’ appetites to do business there, with an exit ban imposed on a senior executive of the Japanese bank Nomura adding to the perceived risks of doing business in China.

In May of this year, UBS announced that it would not be opening a new fund unit in China and that it would instead remain a shareholder in the joint venture ICBC fund until the end of the year rather than set up a new unit.

During the months since UBS took over Credit Suisse, it has also abandoned plans for Credit Suisse to set up a bank in China which would be incorporated locally.

There has also been a significant reduction in jobs at UBS in the region, with the majority of their Hong Kong-based investment banking staff as well as the Securities Research Unit at Credit Suisse being laid off.

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