UBS TO TAKE CONTROLLING STAKE
Swiss giant first foreign bank to own more than 50pc shareholding in China company
UBS has been authorised by China’s securities regulator to take a controlling stake in a local business, making the Swiss giant the first foreign bank allowed to do so under new rules.
Beijing in April relaxed the rules in the financial industry in a move to open up the economy.
“The China Securities Regulatory Commission recently approved UBS AG to increase the shareholding ratio of UBS Securities Co Ltd to 51 per cent,” said the regulator on Friday.
“This is the first foreign-controlled securities company approved by the China Securities Regulatory Commission after the implementation of the Measures for the Administration of Foreign-invested Securities Companies.”
USB AG, which currently owns about 25 per cent of shares in the USB Securities Co Ltd joint venture, said it would acquire stakes from China Guodian Capital Holdings and Cofco.
Other financial firms like Wall Street titan JP Morgan Chase and Japan’s Nomura Holdings are still awaiting approval.
Laws limiting foreign ownership of local financial firms have long stopped global banks from independently operating in China and limited their growth.
But Beijing said it would liberalise shareholding limits in the financial services industry last year, soon after United States President Donald Trump visited.
Officials moved to make good on the pledge in April, immediately allowing foreign investors to take 51 per cent stakes in securities firms and fund managers, with pledges set out to eventually allow full control.
Earlier this week, two European insurance giants Allianz and Axa received approval to expand their footprint in China — Allianz has been allowed to start a company fully funded by foreign capital while Axa would take full control of a joint venture.
Beijing has pledged to open up its economy as it looks to head off trade tensions have increased with the US, which accuses it of using unfair practices to get an advantage for its own firms and destroying American jobs.
Trump has slapped punishing tariffs on more than US$250 billion (RM1 billion) in Chinese imports so far this year and China responded with its own tariffs on US$110 billion in US goods.
But the US president has threatened to target the remaining US$267 billion worth of Chinese imports as well, hitting Apple iPhones and laptops produced in China.
Trump was set to meet with Chinese leader Xi Jinping in Argentina on Saturday where they are attending the Group of 20 summit.